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Recently, Bitcoin has experienced a "roller coaster" market with a crazy rise and then a sharp fall. According to Investing.com, after New Year's Day this year, the price of Bitcoin exceeded $40,000 for the first time on January 7, and its price doubled in less than a month. But then it began to fall back, and on January 11 it once fell to $30,411.6. As of press time, the price of Bitcoin was $35,970.3. Industry insiders said that Bitcoin is fundamentally different from financial products. It has no actual value support, no sovereign credit and commercial credit. Bitcoin trading is ultimately speculation.
Five hype routines
According to experts, the trading speculation methods of virtual currencies such as Bitcoin can be summarized into five types, including overseas virtual currency trading platforms improving their rankings by "brushing up volume" to attract users; deliberately causing frequent downtime to cause trading platform users to go bankrupt; using public opinion to manipulate market prices; inducing leveraged trading; and trading platforms running away.
In terms of using public opinion to manipulate market prices, pyramid schemes, hype and other behaviors have been repeatedly banned in the virtual currency industry. Market makers use various methods such as ground pyramid schemes, online advertising and hiring influential people in the industry to endorse and increase the influence of tokens, lure investors to invest, and achieve the purpose of short-term price manipulation.
Trading platforms also run away from time to time. According to reports, virtual currency trading platforms that run away can be roughly divided into two categories: one is a trading platform with obvious pyramid scheme characteristics, with a multi-level pyramid scheme incentive system, and runs away directly after raising funds; the other is a trading platform that truly develops trading business, but due to various reasons, it goes bankrupt or runs away with the funds. Relevant departments have monitored and found that in 2020, more than 40 overseas virtual currency trading platforms ran away with the funds.
Beware of related financial fraud
In addition to speculation, it is also common for criminals to commit financial fraud by issuing virtual currencies.
For example, creating fake projects. Virtual currency trading platforms often use some small currencies, taking advantage of investors' mentality of getting rich overnight, and modifying the background data to generate false gains in a short period of time to attract investors to enter the market, and then use false declines to make investors' funds shrink significantly. Some even directly collect money and run away. For example, some "air coin" projects broke 90% of the issue price when they went online, and returned to zero in less than a month, and swindled more than 100 million yuan in six weeks, causing huge losses to investors.
In addition, there is also the phenomenon of misappropriation of customer funds. On March 8, 2018, the Financial Services Agency (FSA) of Japan imposed administrative penalties on a number of virtual currency trading platforms. Among them, the trading platform Bit Station was found to have employees misappropriating customer funds without authorization and was ordered to suspend operations for one month for rectification.
Stricter review and supervision
Experts say that Bitcoin accounts are not linked to personal names, addresses and other information, which facilitates illegal activities such as money laundering and terrorist financing. Regulatory authorities in various countries have either banned transactions or introduced policies to impose strict restrictions. Several financial institutions in the United States have submitted applications to the U.S. Securities and Exchange Commission (SEC) to issue Bitcoin open-end funds, but all were rejected by the SEC due to market fluctuations and industry manipulation.
The increasingly stringent global regulation will bring uncertainty to the future trend of Bitcoin. For example, on November 26, 2020, affected by the regulatory measures to be introduced by the US Treasury Department, Bitcoin fell by about $3,000 in one day, a drop of more than 13% at one point.
Experts said that there are currently no Bitcoin trading venues in my country, and there are no consumer protection measures for "climbing the wall" to buy Bitcoin abroad. If investors suffer losses, they can only bear them themselves.
In September 2017, under the framework of the special rectification of Internet financial risks, the People's Bank of China and seven other departments issued the "Announcement on Preventing the Risks of Token Issuance and Financing", which clearly pointed out that token issuance and financing refers to the financing entity raising so-called "virtual currencies" such as Bitcoin and Ethereum from investors through the illegal issuance and circulation of tokens. It is essentially an act of illegal public financing without approval, and is suspected of illegal issuance of token tickets, illegal issuance of securities, illegal fundraising, financial fraud, pyramid schemes and other illegal activities. No organization or individual may engage in illegal token issuance and financing activities.
It is understood that the People's Bank of China has organized various regions to carry out the cleanup and rectification of ICO and virtual currency trading platforms, and has closed 211 domestic virtual currency trading platforms. At present, relevant departments have established a technical monitoring system. If any related illegal financial activities are found, they will be transferred to the illegal fundraising department and public security organs for severe crackdown in accordance with the law. |
