A Shenzhen-based gold trading platform collapsed after engaging in operations that amounted to leveraged gambling with no physical backing, leaving more than 150,000 investors scrambling to recover their funds.
The Jere collapse, the largest in a recent wave of unauthorized gold platform failures across China, has now escalated to a stalemate after victims rejected a repayment plan that would pay a portion of the principal amount in exchange for relinquishing all legal rights.
How Jere Worked
Jereh operated in Shuibei, China's largest gold and jewelry trading hub. The platform attracted a large retail following by offering zero-commission gold exchange, attractive buy-in prices, and a product called “preset price trading” that allows users to lock in the price of a gram of gold with a deposit of just $4.
In reality, this mechanism functioned as an unauthorized option trade. The platform takes the other side of every user's bet, with leverage reaching up to 40x. Physical gold never changes hands. When the user made a profit, Jere was obligated to pay the difference to the user. When the price of gold soared, those debts became unsustainable.
bank run
Withdrawals were first restricted around January 20, with a daily limit of $69 or 1 gram of gold. Thousands of investors, many of them tourists from other provinces, flocked to the company's Shenzhen office to request funds. There were also reports of scuffles with police. Local media reports said most of the victims were housewives and working-class investors.
Dividend much lower than expected
The local government announced on January 31 that it had set up a special task force and began the repayment process after Jere disposed of his assets and raised funds. A third-party audit was commissioned and authorities said the widely circulated figure of 13.4 billion yuan in unpaid funds was “significantly exaggerated.”
However, for the victims, the reality of repayment was harsh.
The platform initially offered two options: paying 20% of the principal in one lump sum or 40% in 12 monthly installments. In reality, the actual payout ratio is not even well below the 20% floor.
One Henan investor who invested $5,100 submitted two redemption requests. The first company returned an offer of $1,219. The second fell to $244. Another victim, who had more than $44,400 in cash, 5.2 grams of gold and 1,000 grams of silver in his account, was offered just over $2,800, about 6% of his holdings.
Customers who bought platinum through the platform were completely excluded from payment calculations, raising suspicions that Jere never held the physical metal.
Criminal amnesty clause sparks outrage
Adding to the backlash, Jere's redemption process requires victims to sign three agreements, including a “letter of criminal amnesty,” a document that several investors say waives their right to pursue further legal action, regardless of the final payout amount.
“Even after signing, there is no guarantee that you will actually receive the money. And you are also giving up the right to sue. 1,700 yuan ($236) for what?” one investor in Zhengzhou told local media.
Many people have refused to sign the petition, and conflicts with the platform continue. Several people said they were preparing to file their own lawsuits.
Not an isolated case
Jere is not alone. Several similar platforms across China have faced cash flow crises in recent months as soaring gold prices lack proper hedging mechanisms and overwhelm operators who bet on their own customers.
Jere's social media accounts have been deleted. Repeated phone calls to the company went unanswered, and owner Zhang Zhiteng could not be contacted.
The Luohu district task force said it was continuing to register complaints from victims. The investigation is still ongoing.
