Dongguan-based peer-to-peer lending platform tuandai.com is being investigated for illegal fund-raising, the public security bureau of Dongguan said in a statement.
It means the more than 220,000 investors who lent their money to borrowers via Tuandai are unlikely to get back a total of 14.5 billion yuan (US$2.15 billion) in outstanding loans.
According to market research, the seven-year-old Tuandai.com is among China’s top P2P platforms. As of February 28, the company has conducted online lending businesses worth more than 130.7 billion yuan.
The statement said Tuandai’s actual controller, Tang Jun, and another person with the surname of Zhang have surrendered themselves to police. They have been put under criminal compulsory measures, it said.
It is yet another major crisis in the Chinese P2P industry after a wave of defaults since June 2018, which wiped out billions in savings that retail investors put in.