According to SIAS, the scheme promises exceptionally high returns with low risk, but it relies on recruiting new participants to keep the money flowing.

The warning came after Singapore’s Ministry of Foreign Affairs and police reported that 52 Singaporeans had been arrested and detained in China on suspicion of involvement in pyramid‑scheme activities.

A CNA investigation found that recruiters promoted the investment potential of Guangxi province, especially the city of Nanning, to Singaporean investors, offering different membership tiers that required varying upfront payments and urging recruits to find more members.

Potential participants were sometimes invited to travel to China to attend presentations and meet existing investors, according to the investigation.

Promoters often claimed they had secret connections to government officials or that the projects were linked to government‑backed development programmes.

“Investors should also beware that scammers can impersonate government officials by using sophisticated tools such as artificial intelligence,” SIAS said.

SIAS advised investors to verify any claim independently, to be skeptical of guaranteed or unusually high returns, and not to rely on friends or family for due‑diligence, noting that “friendship is not due diligence.”

The association explained that early participants may receive money funded by later participants, creating the illusion of a legitimate investment, but the model collapses when new money slows or stops.

Before transferring any money, SIAS said investors should ask who holds the money, how returns are generated, whether the investment is regulated, and whether they can withdraw funds freely; if satisfactory, independently verifiable answers are not available, they should walk away.