Chasing the promise of outsized returns, 48-year-old businessman He Xiaolun started trading oil last August on a platform developed by the Shaanxi Non-ferrous Metal Exchange.
Over the next five months, he lost nearly 3 million yuan ($455,000).
"Initially, I lost several thousand yuan," He said. "The exchange's trading adviser told me to put in more money, and guided me into trading more frequently."
The exchange did not respond to questions from Reuters. The adviser said clients made trading decisions and it was not the exchange's fault if they lost money.
He and other investors say they were duped by online commodity trading platforms that have cropped up over the last few years in China. Some have been using internet dating sites to lure customers.
The country's securities regulator has said trading on such platforms is highly speculative and therefore risky, and the cause of heavy losses for many clients.
The China Securities Regulatory Commission (CSRC) also warned the "large number of complaints and disputes" against such exchanges were a threat to "social harmony and stability".
Outrage among China's growing class of retail investors over the disappearance of their life savings has become a big headache for the stability-obsessed Communist Party after a series of financial scandals in recent years.
By the end of 2015, annual spot commodities trading volume had reached $4.5 trillion on more than 350 independent exchanges in China, according to data from Euromonitor. Trading volume grew 35 percent annually from 2011 to 2015.
Investment bank Jefferies estimates there are more than 600,000 active spot commodities traders in China.