Shenzhen's local financial regulator has issued a blunt warning to companies, individuals and payment providers: stop operating illegal gold trading schemes. The notice, issued jointly with nine other municipal departments, bans a range of practices – including pre‑set price “reservation” trades, leveraged and deferred settlements, gold‑custody and repurchase arrangements that promise fixed returns, and the use of WeChat groups, mini‑programs, apps or live streaming to solicit retail investors without real physical delivery.
The directive specifies three sets of prohibited actors and activities. Enterprises may not run pre‑price or margin trades that let clients lock a gold price with a small deposit and settle gains or losses without physical delivery; they may not market gold custody or rental products as “guaranteed” payback schemes; and they must not develop, distribute or support software that enables off‑exchange gold trading. Individuals are forbidden from organising or participating in those schemes and may only invest in gold via regulated channels such as gold ETFs, exchange‑traded futures, authorised banks and accredited retailers.
Financial institutions and non‑bank payment firms face explicit compliance duties. They must register gold business operations with regulators or obtain required approvals, comply with large‑value and suspicious transaction reporting rules, and refuse service to merchants engaged in illegal gold trading. The notice invokes a battery of national laws and regulations – including the Criminal Law, the People’s Bank of China Law, the Futures and Derivatives Law, anti‑money‑laundering statutes and the Gold and Silver Management Regulations – and warns that suspected criminal activity will be handed to the public security authorities for prosecution.
The move responds to a surge of retail gold activity in recent years and to repeated instances of fraud and systemic risk tied to informal channels. Chinese consumers have been drawn to gold as a perceived hedge amid market volatility and have been courted by fintech operators offering high‑return, low‑friction products via social media and apps. Regulators have grown concerned that off‑exchange schemes create hidden leverage, opaque counterparty risk and routes for money‑laundering or illegal fundraising that could spill across the financial system.
For the fintech and jewellery sectors the notice is consequential. Platforms that relied on mini‑programs, app‑based trading or social‑selling networks must either formalise under regulatory supervision or discontinue services; payment providers face operational and reputational risk if they continue to process transactions for suspect merchants. For ordinary investors the notice narrows the range of retail offerings but reinforces safer channels for acquiring physical gold or exposure through regulated financial instruments.
The Shenzhen announcement also fits a longer pattern of Chinese authorities tightening oversight of retail financial innovation. Beijing has repeatedly moved to close regulatory gaps where new technology enables financial activity that outpaces existing supervision. The practical effect is likely to be a re‑routing of retail gold flows toward exchanges, banks and ETFs, a short‑term contraction in informal liquidity, and a compliance headache for smaller operators that monetised gold‑trading narratives on social platforms. Enforcement will determine how fast the market adjusts and whether similar crackdowns spread to other cities where off‑exchange gold trading has thrived.