The Story of Xinkangjia DGCX's Big Scam Case: 13 Billion Yuan Lost

In June 2025, a shockwave hit thousands of investors across China. Xinkangjia DGCX, an online investment platform, suddenly froze all withdrawals without warning. Many woke up to see their accounts emptied or blocked, their life savings locked away. 

Panic spread quickly on social media as families demanded answers. At the center of this crisis was a complex web of fake promises, deceptive marketing, and grand claims of legitimacy. Reports suggest the total loss may reach 13 billion yuan, affecting over two million people. 

This is the story of how the Xinkangjia DGCX scam case unfolded, exposing vulnerabilities in online finance and shaking public trust in digital asset investments.

Background of the Xinkangjia DGCX Scam Case

Xinkangjia DGCX did not appear out of nowhere. As early as 2019, the company promoted itself by claiming to sell oil filtration equipment worth 200,000 yuan to an enterprise. 

It falsely framed this small transaction as part of a strategic partnership with major state-owned companies such as Sinopec. By 2021, the project was operating under the name Guizhou Xinkangjia Big Data Co., Ltd. 

Despite listing a registered capital of 30 million yuan, public records show it paid nothing in practice and was already flagged as a shell company with abnormal operations.

In May 2023, the platform launched what it called the "DGCX Xinkangjia Big Data Exchange." It claimed to be the official branch of the Dubai Gold and Commodities Exchange (DGCX) in China and boasted supposed partnerships with PetroChina and COSCO Shipping. 

To appear credible, it used fake contracts, doctored official letters, and manipulated website screenshots. In reality, the legitimate DGCX repeatedly denied any connection with Xinkangjia, warning the public about such false claims.

Rumors later circulated that the platform's founder, Huang Xin, had fled overseas and even left messages in investor chat groups. While these messages could not be independently verified, they intensified the anger and confusion among victims.

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How the Xinkangjia DGCX Scam Worked

Multi-Level Pyramid Scheme

A major element of the Xinkangjia scam case was its structured recruitment model. The platform established a nine-level pyramid system, using military-style titles such as commander, brigade commander, and platoon leader. 

Participants were encouraged to recruit others to climb these ranks, earning commissions for every successful referral. For example, a participant could become a squad leader by recruiting three people, receiving 10 USDT per referral. 

Higher ranks required vast networks of thousands of recruits, with promises of generous monthly salaries and bonuses.

This system ensured a constant inflow of new funds, which is typical of pyramid schemes. The promise of promotions and rewards encouraged participants to push harder to bring in new members, fueling the illusion of growth and stability.

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Fake Trading Platforms and Backend Control

Xinkangjia DGCX also claimed to offer professional trading services in gold, oil, and foreign exchange markets. Its app and website displayed what seemed like real-time trading data. Users were led to believe they could profit from high-leverage trades in global commodities. 

But the entire system was controlled from the platform's backend. No real trading took place. All transaction records and profit displays were fabricated to manipulate investors into depositing more money.

Unrealistic Return Promises

A hallmark of the Xinkangjia DGCX scam case was the promise of high daily returns. The platform told investors they could earn up to 2% per day, claiming that with big data analytics and advanced trading strategies, they could double investments within a week. 

Marketing slogans like "Return of principal in 3 days" and "VIP internal arbitrage signals" played on investor greed. Screenshots of large withdrawals and lists of supposed top earners were shared to convince others that these returns were real.

Increasing Withdrawal Barriers

As the scam neared collapse, investors found it harder to withdraw their funds. On June 25, 2025, the platform stopped processing withdrawals entirely. It then claimed that regulatory authorities had frozen the accounts for tax evasion. 

Investors were told they had to pay taxes of 10% of their holdings to unlock their money. Even then, withdrawals were delayed with complex conditions, including high fees and long waiting periods.

To extract even more before shutting down, the platform ran promotional stunts such as "Invest 500,000 to get a Tesla," encouraging desperate investors to put in more money.

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On-Chain Analysis of the Fund Flow

Investigations into the Xinkangjia DGCX scam case used blockchain analytics to trace the movement of funds. 

According to SlowMist’s MistTrack system, over 800,000 user recharge addresses were analyzed, suggesting the scam may have moved up to 1.5 billion US dollars worth of USDT. While the exact path of all funds remains unclear, the pattern revealed classic signs of a Ponzi scheme:

• Funds flowed in through centralized exchange hot wallets and were distributed to many addresses in fixed amounts, matching the "membership fees" investors paid.

• Multiple layers of addresses transferred the money to pooling addresses controlled by the platform.

• These pooling addresses then moved funds in a one-to-many pattern, resembling withdrawal payouts but often with high fees, suggesting a profit skimming system.

• Addresses were frequently rotated, likely to avoid detection and blacklisting.

On-chain data also showed complex permission structures among addresses, indicating automated fund management designed to make tracking difficult.

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The Collapse and Regulatory Warnings

Despite numerous warning signs, Xinkangjia DGCX continued to attract investors. Local police and financial authorities in various regions issued repeated alerts, warning the public about its suspected illegal fundraising and high-risk activities. 

But the platform cleverly restricted registrations with invitation codes and spread through closed WeChat groups and offline events, creating an air of exclusivity and trust.

It especially targeted middle-aged and elderly investors, many of whom lacked familiarity with the risks of digital assets and online scams. 

By claiming partnerships with state-owned giants and positioning itself as a "national-level project," it gained the trust of many who ignored the warnings.

After the withdrawal channels closed, customer service disappeared and management vanished. There were rumors that core technical staff and key agents had been detained by police. 

Authorities reportedly froze around 120 million yuan in related accounts, but this is only a small fraction of the estimated total losses.

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Lessons from the Xinkangjia Scam Case

The story of Xinkangjia DGCX’s big scam case is a stark reminder of the risks in the digital finance world. 

Combining blockchain payments, false corporate endorsements, and classic pyramid recruitment methods, it presented a sophisticated front while operating an old-fashioned Ponzi scheme.

Users must remember that legitimate financial products do not promise extraordinary short-term profits, nor do they require recruiting others for commissions. 

High returns often come with high risks, and promises of doubling your money in days should raise immediate red flags. Authorities and security researchers continue to urge the public to stay cautious, verify claims, and seek reliable information before investing.

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Frequently Asked Questions

What is the Xinkangjia DGCX scam case?

It is a large-scale online investment fraud in China where the platform Xinkangjia DGCX promised high returns and claimed fake affiliations, causing estimated losses of 13 billion yuan.

How did Xinkangjia DGCX attract investors?

Through false claims of partnerships with state-owned companies, promises of high daily returns, multi-level recruitment rewards, and fake trading interfaces to simulate profits.

Was Xinkangjia DGCX really linked to the Dubai Gold and Commodities Exchange (DGCX)?

DGCX officially denied any connection or cooperation with Xinkangjia DGCX and warned users about fraudulent claims.

How did the scam operate on-chain?

Investigations revealed a complex network of addresses transferring funds in patterns typical of Ponzi schemes, with pooling addresses, high-frequency transfers, and rotating wallets to avoid detection.

What can investors learn from this scam case?

Be wary of high-return promises, verify claims through reliable sources, avoid schemes that require recruiting others, and recognize the warning signs of pyramid structures.