What happened: Chinese police have frozen RMB 10 billion (around $1.5 billion) worth of assets across more than 380 peer-to-peer (P2P) lenders in a large-scale investigation spanning 16 countries. The operation, code-named “Fox Hunt,” has led to the arrest of 62 suspects since June.
Why it’s important: Chinese authorities have been clamping down on the P2P lending industry that started flourishing in an under-regulated environment a decade ago. Rife with fraud, P2P lending has earned a bad name in China. Most infamously, it spawned the country’s largest Ponzi scheme in 2015. With President Xi Jinping’s plans to reduce risk in the financial system, the industry is now in the midst of a drastic shakeup, which has already led to the collapse of hundreds of lenders and many investors losing their life savings. In mid 2018, a series of protests by victims of busted P2P lending platforms broke out in the streets of major cities in China.