The collapse of the exchange sparked a series of nationwide protests against the involvement of Chinese local governments in supporting fraudulent fundraising schemes.
In 2015, the exchange blocked the withdrawal of funds and froze its accounts, triggering large-scale protests by defrauded creditors in Shanghai, Beijing and other major cities.
[2] Twenty-one Yunnan executives, including the founder, Shan Jiuliang, were charged with embezzlement and of sabotaging financial markets in the Kunming Intermediate People's Court in 2018.
The exchange focused on metals used in technologies promoted in the official Chinese strategic plan, including liquid crystal display (LCD) screens and solar panels.
[5] It dealt in 14 rare nonferrous metals including indium, bismuth, antimony, and terbium, purchasing and storing them for resale.
[6] Because of ri jin bao's high returns and seemingly low risks, it rapidly became popular especially among middle-class investors.
Since only small amounts of the stockpiles could be sold in a short period, Fanya would inevitably face a liquidity crisis if any sizeable request for cash withdrawal was made.
[2][13] The exchange proposed to sell its stocks of 6 rare metals and undergo extensive debt restructuring to resolve the crisis.
[9][15] Early in 2016 Shan was arrested with 15 other suspects, and in March 2016 Kunming police announced that they had determined that the exchange acted illegally in its use of investors' funds.
[9] Investigators blamed regulatory failures for allowing the exchange to operate without proper supervision, but local authorities insisted they had done their job well.
Fanya investors organized to break out from behind the "Great Firewall" to protest on Twitter and press for attention from foreign media.
[7][16] In July 2018, 21 executives involved in the exchange were charged in the Kunming Intermediate People's Court with embezzlement and sabotaging financial markets.
[3] The company was fined 1 billion yuan ($149.04 million) for illegal fundraising, and Shan was sentenced to 18 years in jail for crimes including embezzlement.