Every classic scam that endures through time inevitably has its clever aspects. The brilliance of the Ponzi scheme lies in its ability to use new investors' funds to pay returns to earlier investors, creating the illusion of a legitimate business with apparent, albeit fraudulent, profits. Few investors resist the temptation to withdraw their money and leave, and even fewer can do so. Most choose to continue rolling their investments for compounded profits until everything crumbles to nothingness. Some people, having made actual profits, develop an unshakeable faith in the scheme. Others, believing they aren't the last to hold the bag, remain smug—yet invariably they all end up empty-handed.
DingYiFeng Group was established in 2011. Its founder and chairman, Sui Guangyi, was initially a "qigong master" in Northeast China. During that particular period, many people held unrealistic expectations for qigong—not only believing it could enhance fitness but even cure diseases and ensure eternal youth. To this day, there are still many people studying qigong, even writing papers on it, which allowed this somewhat famous "qigong master" to meet numerous individuals from various sectors.
Sui Guangyi claimed he once served as the deputy mayor of Dunhua City, Jilin Province in the 1990s, having been the youngest deputy mayor in the province. However, no official channel has confirmed this experience, nor have any official reports been made. Nevertheless, with strong marketing and promotional skills, numerous reports regarding his assumed role as the deputy mayor have emerged, undoubtedly adding luster to his later endeavors. While many people are wary of merchants, a deputy mayor garners much recognition and trust, at least in terms of his "capabilities."
Regarding the unsubstantiated claim of his mayoral experience, Sui Guangyi and DingYiFeng treat it as a badge of honor, highlighted separately in the character profile on the official website. Ordinary investors hardly have means or ways to investigate the existence of a deputy mayor nearly 30 years ago. Moreover, many of these investors were not even born 30 years ago, so there are few who would question his supposed identity.
Beyond the aura of a deputy mayor, Sui Guangyi surrounded himself with multiple layers of prestige. The title of a deputy mayor alone could not explain his actions or motives, nor did it clarify how he could achieve miraculously stable and high annual investment returns. He needed a seemingly reasonable justification, which he found in "Chinese traditional culture," blending it with modern financial practices to concoct a so-called "Zen investment" strategy.
Sui Guangyi held Chinese traditional culture in high esteem, knowing that many people in the country have a "blind faith" in it. They believe that all present challenges can be explained and solved by traditional culture, from enhancing health to ensuring family well-being. Thus, it was not far-fetched for him to apply it to financial investments as well.
There were those who questioned his Zen investment strategy, but by then, he no longer needed to step forward to rebut them personally. His followers would voluntarily defend him, equating "Zen investing" with traditional culture, particularly the "Tao Te Ching" and the "I Ching." These books are treasures of traditional culture, known for their obscurity and difficulty. Even some university professors cannot claim to master them. When faced with skeptics' questions, the simplest tactic was to ask whether they understood these complex texts. If they could not, then they had no right to question "Zen investing."
By appropriating "Chinese traditional culture" and an "official resume," DingYiFeng had already captivated a large number of followers, but that was not sufficient. Since those who are gullible are few, to broaden his target audience, he needed a final touch, commonly used in Ponzi schemes: the lure of stable, reliable returns.
This promise is irresistible to most investors, who develop a liking for their partners through successful cooperation over time. Such profound trust, when it involves money, carries significant risk.
After several punctual payments, investors' trust in DingYiFeng deepened. Upon receiving their paper profits, they would reinvest them immediately, expecting even greater returns next time. The snowball effect grew, and many believed they could achieve financial freedom without further effort. Regarding the more cautious investors who wanted to cash out, the firm did everything possible to retain them, ensuring it was never as easy as simply withdrawing money from a bank.
After amassing substantial funds from investors, Sui Guangyi did not abscond with the money as other Ponzi schemes often do. Instead, he chose a long-term strategy—boosting investor confidence by acquiring stakes in and taking control of multiple listed companies, while branching out into other sectors like culture, tourism, planting, and magnetic energy. Although these ventures did not result in actual high profits, they gave investors the illusion of a rapidly expanding, thriving corporation. This confidence is critical for a Ponzi scheme, as lost confidence typically signals a complete collapse.
As DingYiFeng's snowball grew, its Hong Kong-listed share price also soared. Starting in the second half of 2017, the price skyrocketed from 1 HKD in September 2017 to 27 HKD in February 2019. After slight fluctuations, it stabilized above 23 HKD until March 8 when DingYiFeng unexpectedly announced that it would suspend trading. Although the suspension and subsequent whistleblower incident came as a surprise to investors, many decided to keep faith in their "good reputation," with some even spontaneously rallying in support.
Ten months after the suspension saga, the miracle of resumption occurred. The share price, which had been as high as 23 HKD before the suspension, faced a steep decline upon resumption. In less than a year, it plummeted to around 2 HKD, causing investors to lose confidence and attempt to retrieve their money.
After the suspension, the secret behind the previous meteoric rise in stock prices was revealed: company employees, under the direction of their qigong boss Sui Guangyi, had been buying up their own stocks en masse.
Faced with a trust crisis, DingYiFeng opted to step up its promotional efforts, continuing to use old tactics in an attempt to buy time. A multitude of media and social media platforms began advocating for DingYiFeng, reassuring investors to maintain their confidence from various angles.
This series of promotional efforts successfully restored confidence in most investors, and the stock price began to hover around 3 HKD. Rational investors knew it was time to leave, but sadly, most were blinded by the "regular payments" and failed to recognize the vulnerability of the company's longevity.
The bubble continued until early 2023, when it was finally exposed. On February 19, 2023, the Shenzhen Municipal Financial Regulatory Authority issued a "Risk Warning on the Related Business of DingYiFeng," accusing DingYiFeng of suspected illegal fundraising, causing a huge stir. Some investors who were not too deeply drawn in tried to escape.
Further investigations uncovered that the much-hyped DingYiFeng Changbai Mountain project was likely just a shell, exacerbating the trust crisis. Amid these challenges, Sui Guangyi started appearing publicly in various events more frequently and even brought along a Middle Eastern prince, fabricating a lie about a 30 billion investment to try and sustain a credible atmosphere.
However, this time the scheme was not as impenetrable as before. In the second half of 2023, DingYiFeng inevitably faced a payout crisis, nicknamed "the prince's glass slipper," which did not save the teetering DingYiFeng. Sui Guangyi's old gambit of smoke and mirrors was ineffectual—the pyramid he built at the foot of Mount Changbai, touted as a conduit for "universal energy," could not alter reality, despite his grand claims.
In January 2024, DingYiFeng finally buckled. The firm could neither pay the dividends it promised investors nor abscond with the funds. Their only option was to delay, issuing a notice titled "DingYiFeng International Asset Management Group: Major Positive Announcement for All Investors," stating the company was about to undergo a major transformation.
Well-aware that they could no longer bury their heads in the sand regarding the current collapse, they settled on stalling for time. They admitted the firm's predicament but denied any plans to flee. Instead, they proposed a "transformation" and took the opportunity to pitch so-called "digital options" to the investors questioning them and demanding their principal and interest, claiming a tenfold or even hundredfold profit could be reaped within eight months, leaping socially in status.
This delaying tactic surprisingly found favor with investors, many of whom chose to trust them, willing to wait for eight more months. Some were blinded by the potential for profit, and others, trapped and unable to exit, placed their hopes on this slim chance. Whatever their reasoning, their outcome was the same—total loss.
"This is the time for everyone to unite, to stand up and support the company on platforms like XiaoHongShu and Douyin, to endorse the company and help it through these tough times. Only then can there be a possibility of recovering invested funds. Otherwise, if the company falls, nothing can be retrieved."
Such sentiments, relying on the conscience of the wrongdoer, are both ridiculous and pitiful. These people are being punished for uncontrollable greed, but the punishment is excessively harsh. Many have lost everything, mortgaging their properties and getting into debt to pour their wealth into DingYiFeng. They may have sensed something was amiss, but they are powerless, their pleas and threats unable to retrieve their money, leaving them clinging to that minuscule sliver of hope.
Less than a week after announcing the suspension of payments on January 10, 2024, DingYiFeng issued another announcement on January 16, stating that the so-called "digital options" launch was proceeding smoothly and that the first batch would be listed within three months.
Just when things seemed to be calming down, there was another twist on the morning of January 17. DingYiFeng Holdings (00612.HK), the main company of DingYiFeng, issued a clarification notice on the Hong Kong Stock Exchange stating that the "Major Positive Announcement for All Investors" dated January 10, 2024, published by "DingYiFeng International Asset Management Group," was not issued by the company. The notice also stated that the dubious business practices cited by the media had no connection to the company, its subsidiaries, or affiliated companies.
Within just one week, DingYiFeng's stock price plummeted below 1 HKD, a devastating blow, and the clarification notice only fueled the fire. A vast number of investors returned with inquiries, and at this point, the staff began to feign ignorance, claiming no knowledge of the clarification notice, and assuring that the previously promised benefits after eight months would proceed as usual.
As of January 18, 2024, the DingYiFeng incident is still unresolved. This is an earnest plea to all investors: try your utmost to retrieve your investments. The "delaying tactic" of eight months will likely end in one of two ways: either the fraudsters are arrested en masse, or the leader absconds with the funds, leaving behind a group of financially devastated followers waiting in vain. While these outcomes seem very different, to the investors, they are indistinguishable, both indicating a total loss.
The old adage remains true: investing involves risk; proceed with caution.
