Although local authorities in China have been mostly focused on developing and promoting the country’s digital yuan initiative, the latest crypto rally hasn’t gone unnoticed by its top financial regulators. China has long warned its citizens about the dangers of dealing with any kind of virtual asset that hasn’t been either issued or at least approved by its central bank.

The latest effort to disincentivize the use of cryptocurrencies came from Shenzhen where the city’s main financial watchdog issued a stark notice to its citizens warning them about the risk associated with digital assets. The Shenzhen Local Financial Supervision Bureau issued a “risk alert” on its official website aimed at curbing “illegal activities” surrounding the use of cryptocurrencies.

According to the document, the Shenzhen Local Financial Supervision Bureau said that the recent price rise major virtual currencies such as Bitcoin and Ethereum have seen has led to a significant increase in price speculation. And with cryptocurrency trading still being banned in China, this means that most of this speculation happens over-the-counter.

Aside from crypto trading, local financial authorities in Shenzhen also seem to be worried about the rise in illegal activities they have reportedly detected in the industry. The regulator said that nefarious actions have become rampant in the market. There has been an increase in reports of illegal fundraising, pyramid schemes, online gambling, cryptocurrency frauds, and other criminal activities in the crypto industry.

The notice said that there has been a significant rise in scammers offering so-called “Bitcoin wealth management services” to investors, promising “the preservation of existing investor capital and protection of future income.” In some cases, scammers have lured investors to buy newly issued tokens that acted as “investment rebates,” even going as far as registering companies outside of China to lure foreign investors to participate in the scam.

To combat these, and any other illegal activities that might arise in the crypto industry, the Shenzhen government partnered with the city’s financial regulators to create a special task force. The group, called the Shenzhen Financial Risk Rectification Working Group will be tasked with investigating and pursuing all illegal activities related to cryptocurrencies. Government employees in the group will be conducting extensive investigations, which include doing on-sight interviews, researching administrative files, and filing charges against those suspected of criminal activities.

According to the Shenzhen Local Financial Supervision Bureau, the only way the rise in illegal activities in the crypto market can be stopped is by vigilant reporting. The financial regulator called on its citizens to participate in the prevention of financial crime by reporting all activities they believe to be illegal. The authorities also warned people to “beware” of being deceived by various cryptocurrency and digital asset platforms online.