Everything You Need to Know About DGCX Xinkangjia Scandal

A new wave of concern is sweeping through the Chinese crypto community after the exposure of the DGCX Xinkangjia scandal, a suspected large-scale Ponzi scheme that falsely claimed ties with the Dubai Gold and Commodities Exchange (DGCX). 

According to an official risk warning issued by the Taohuajiang County Public Security Bureau, this platform has allegedly defrauded investors by impersonating DGCX, offering promises of high-yield returns, and illegally soliciting funds under false pretenses.

Source: AInvest

What is DGCX Xinkangjia?

DGCX Xinkangjia claimed to be the official Chinese branch of the Dubai Gold Exchange, luring investors with the prestige of the DGCX brand. It promised users high profits through a referral-based system, where earnings were calculated based on the number of new users they recruited. This multi-level commission model closely resembles a pyramid scheme, which is illegal in many jurisdictions.

Moreover, the platform was never authorized by the real DGCX, which has no affiliation with Xinkangjia whatsoever. The DGCX has issued no public partnerships or branch announcements relating to China or this platform.

READ ALSO: Why China Banned All Cryptos, In-Depth Analysis

The Collapse and Red Flags

Since June 25, 2025, users have been unable to withdraw their funds from the DGCX Xinkangjia platform. Investors have reported high withdrawal fees, unresponsive customer service, and sudden changes to terms and conditions. This has led to rising suspicions of blockchain fraud, USDT money laundering, and stablecoin-based fundraising scams.

As the fund inflow slowed and no new users joined, the payout structure collapsed — a common failure point in Ponzi operations. Victims are now left with frozen balances, while the masterminds behind the platform are believed to have laundered significant amounts of RMB and USDT through obscure wallets.

Authorities Respond

The Taohuajiang Public Security Bureau has formally launched an investigation, labeling the operation as unauthorized financial activity and warning investors to remain cautious. The bureau emphasized that platforms offering unrealistically high returns, especially those citing ties with global financial institutions, are likely fraudulent.

Citizens have been urged to report suspicious platforms, particularly those involving unauthorized DGCX branches, crypto pyramid schemes, or digital asset laundering operations. This comes as China continues to tighten scrutiny over digital assets and fraudulent token schemes disguised as blockchain innovation.

READ ALSO: China’s Tech Giants Push for Offshore Yuan Stablecoin to Challenge USDT’s Dominance

Why This Matters

This case is a stark reminder of how bad actors exploit the trust and reputation of legitimate institutions to defraud everyday investors. It also sheds light on a growing issue: the misuse of crypto terminology and DeFi platforms to run Ponzi schemes under the radar, often using stablecoins like USDT to bypass banking regulations.

The DGCX Xinkangjia scandal, now known as one of the most blatant crypto Ponzi schemes in 2025, highlights the importance of due diligence, platform verification, and regulatory oversight in the digital finance space.

FAQ

What is the DGCX Xinkangjia scandal about?

It involves a fraudulent platform pretending to be affiliated with the Dubai Gold Exchange, running a Ponzi scheme using fake returns and investor recruitment.

Is DGCX involved in this scam?

No. The real Dubai Gold and Commodities Exchange has no connection with Xinkangjia and has not authorized any operations in China.

When did the platform collapse?

Investors began experiencing issues with withdrawals on June 25, 2025, marking the collapse of its fund chain.

What should investors do if they used the platform?

Contact local authorities immediately and file a report. It is also recommended to document all transactions for investigation.

How can I avoid crypto Ponzi scams in the future?

Always verify if a platform is licensed and check if it is listed by reputable financial authorities. Be wary of high-return guarantees and referral-based rewards.