A Chinese anti-American internet celebrity and the chairman of a P2P lending platform, was recently arrested for alleged online fraud, which sparked outrage among his 3 million followers.
Huang Sheng is the CEO of Xitouwang, a Chinese peer-to-peer lending platform. On the Chinese social media platform Weibo, he has over 3 million followers and frequently publishes anti-America posts to attract like-minded followers. His posts have earned him the moniker “Anti-America VIP.”
According to CCP-backed Sina.com, he was arrested on July 13 in Zhenshen on suspicion of illegal financial activities on his Xitouwang platform. Another shareholder and one senior executive were also detained.
According to public records, Xitouwang was founded and went online on May 8, 2014. Huang owns 62% of the company. Xitouwang’s online sales were suspended on February 28, 2020. The platform still has $106 million in outstanding principal from lenders, with over 5,412 investors participating.
According to Xitouwang, the platform has been in operation for 2,642 days, with a total transaction volume of more than $845 million and over 548,000 active registered users.
According to statistics reported in the Chinese Epoch Times, from 2013 to 2015, China Central Television, the CCP’s most influential TV station, reported on and promoted P2P lending dozens of times, and state-level CCP leaders spoke out in favor of P2P lending four times. Beijing, Tianjin, Shenzhen, Nanjing, and Shanghai have all issued policies to encourage the development of the internet finance industry.
According to public data compiled by the Chinese Epoch Times, there are 1,855 known online lending platforms in China. They have 344 million members and a pending balance of approximately $145 billion. These platforms account for only 12.5 percent of all online lending platforms.
According to a Chinese blogger, Huang has a unique business style. He specializes in marketing “patriotic” sentiments, attracting followers by “cursing the United States” for an extended period of time and then directing them to invest their money in his P2P platform.
Huang wrote an article titled “We Are Righteous and Don’t Need To Be Shy” in March last year, when the entire world was hit by the CCP virus pandemic and many countries began to question the CCP over its coverup of the outbreak. To defend the CCP, the world should thank China.
This article was lauded by many official CCP media outlets, including Xinhua, and was widely shared.
Some netizens counted the number of times Huang stated in his articles that the United States had “collapsed” or that Japan had “failed.” Huang claimed that the United States had failed 20 times in three months and Japan had failed 15 times. Despite the fact that this was false, Huang continued to claim that the West had failed miserably. Many of his fans thought the West was a complete failure.
Huang also remembered to push his patriotic marketing by recommending his own P2P platform, which he eventually cashed in on with his fans, in every article.
Dr. Zhang Tianliang, a China affairs expert and YouTube host, stated in one of his videos that many people read Huang’s articles every day, are drawn to his anti-America stance, and then invest in his Xitouwang platform.
People who are drawn in by Huang’s anti-America stance and statements, according to Zhang, are more likely to fall into Huang’s financial trap. So Huang was “screening” people who could be scammed by his anti-American stance and statements.
Despite being imprisoned now, Huang has been heavily covered by the CCP media in recent years, with special reports on him appearing on Xinhua News Agency, CCTV2, Central People’s Radio, Phoenix TV, Shanghai TV, Securities Times, and China Securities Journal, among others.
Huang’s P2P business has received several endorsements from the CCP’s official media.
According to a hot post on the internet by a netizen, the numerous bad debts in China’s state-owned banks pose a threat to financial stability. To address this issue, the CCP began to promote internet financing and permitted the development of P2P platforms in order to attract funds. Bad loans were repackaged as P2P products and sold to the general public, who had no idea what was going on.
After the banks had gotten rid of their non-performing assets, the authorities went after the P2P platforms, forcing them to close. Many P2P platforms began to “voluntarily” exit the market in 2018.
Once the P2P platforms were shut down, the victims had no way of recovering their investments. The government can not be held responsible for their losses, and victims who attempted to recover their losses were frequently persecuted by authorities.
On February 12, 2020, Xitouwang announced that it would conduct a voluntary exit under the supervision of regulatory authorities.
Xitouwang announced its intention to close on March 29, 2020 on March 16, 2020. It announced its payment plan on May 6, 2020, revealing that it had 5,634 lenders and $129 million in unpaid principal.
On November 27, 2020, Liu Fushou, the China Banking Regulatory Commission’s chief lawyer, stated that as of mid-November, the actual number of P2P platforms operating in China had reached zero.
This means that the trillions of dollars in debts owed by P2P platforms were also erased.
On May 21, this year, the Shenzhen police issued a notice prohibiting Huang and other Xitouwang executives from leaving China. The police stated in that notice that Xitouwang still had $106 million in outstanding principal from lenders, involving over 5,412 investors.