Recently, the Beijing Municipal Financial Supervision and Administration Bureau and the Business Management Department of the People’s Bank of China jointly issued a risk reminder on the prevention of virtual currency trading activities, and solemnly warned relevant institutions within their jurisdiction not to provide business premises, commercial displays, and marketing for virtual currency-related business activities. Publicity, paid diversion, etc.

Financial institutions and payment institutions within the jurisdiction shall not directly or indirectly provide virtual currency-related services to customers.

  Affected by this news, on the afternoon of July 6, the price of Bitcoin took a sharp turn and plunged from 35,000 U.S. dollars to 1,000 U.S. dollars. Within a few hours, more than 2.3 billion yuan of funds burst.

As of the afternoon of July 8, Bitcoin prices were still hovering at a low of $33,000.

  my country has always adopted a strict regulatory model for virtual currencies. Recently, the regulatory authorities have taken frequent actions.

In June, the relevant departments of the central bank interviewed some banks and payment institutions such as Industrial and Commercial Bank of China, Agricultural Bank of China, and Alipay (China) Network Technology Co., Ltd. on the issue of banks and payment institutions providing related services for virtual currency transaction hype.

On May 21, the 51st meeting of the Financial Committee of the State Council proposed to crack down on Bitcoin mining and trading, and resolutely prevent individual risks from being transmitted to the social field.

  From cracking down on Bitcoin mining to cutting off the capital chain of virtual currency speculation, a series of regulatory "combined punches" have shown a multi-dimensional, multi-level, and full coverage situation, showing my country's resolute attitude in cracking down on virtual currencies.

According to expert analysis, the reason for the recent increase in the crackdown on virtual currencies is that related transaction hype has been repeatedly banned.

Since 2021, the price of virtual currencies represented by Bitcoin has risen and fallen sharply. Bitcoin has risen from $30,000 to a high of $64,000 in just a few months, and altcoins such as Dogecoin and Shiba Inu coins have emerged endlessly. , Related speculation and trading activities are extremely hot, seriously disrupting the normal economic and financial order.

  “Virtual currency has no actual value support. It is a speculative asset. Participating in related investment and speculation activities faces many risks.” Dong Ximiao, chief researcher of China Merchants United Finance, said that Bitcoin and other virtual currencies entering the trading market are limited in scale and are easy to create for investors. The illusion that "exotic goods can be housed" can easily be influenced and controlled by a small number of institutional investors or individuals.

With the mentality of getting rich overnight, many investors magnify the trading leverage to 5 times or even higher. In the case of large price fluctuations, trading risks are huge.

  At the same time, virtual currency has the characteristics of high anonymity and decentralization. It has become a carrier of money laundering, drug trafficking, smuggling, illegal fund-raising and other illegal and criminal activities. Not only is the transaction not protected by law, it also touches the bottom line and red line of the law.

In addition, like other financial frauds, virtual currency trading platforms often run off.

All kinds of altcoins other than Bitcoin are full of Ponzi schemes and all kinds of lies.

  "If virtual currency is allowed to speculate and develop savagely, it will erode the national currency sovereignty on the one hand, and disrupt the economic and financial order on the other." Dong Ximiao said that my country's regulatory authorities are taking action at this time to block virtual currency risks. The transmission of the country’s economic and financial security is effectively safeguarded.

  In fact, strict supervision of virtual currencies is becoming a consensus in many countries.

South Korea’s recent focus on combating tax evasion using virtual currency has confiscated virtual currency assets worth more than 53 billion won from 12,000 domestic tax evaders; the British financial regulator ordered Binance, a well-known virtual currency exchange, to stop its acceptance in the country. Regulatory activities; it is reported that India intends to directly prohibit the public from trading and holding virtual currencies; etc.

  It is foreseeable that some activities that set virtual currency servers overseas to conduct off-exchange transactions will also face smaller and smaller living spaces and higher and higher regulatory risks.

Therefore, for the majority of consumers, there is an urgent need to enhance risk awareness, establish correct investment concepts, refrain from participating in virtual currency trading hype activities, refrain from blindly following virtual currency-related speculative behaviors, cherish personal bank accounts, and refrain from participating in the recharge and recharge of virtual currency accounts. Withdrawal, purchase and other activities, beware of damage to personal property and rights.

  Li Hualin

Keywords: