Exclusive: Multiple OTC traders are included in the central bank's disciplinary list, and banks are stepping up risk control efforts

This year is the year when the People's Bank of China cracks down on money laundering. Since RMB-cryptocurrency cannot comply with regulations, OTC traders on the edge have become targets of severe crackdowns. Many OTC traders have ceased operations, and the industry is bleak.

In this case, because mainstream banks have a large amount of user data and transaction data, they can more sensitively identify money laundering, virtual currency transactions, etc. through algorithms such as artificial intelligence, so the probability of mainstream banks freezing cards is higher.

People familiar with the matter revealed that the specific process is that after the bank's own system has an alarm and transaction restrictions, it will report to the local central bank. After review, the central bank will issue a corresponding punishment list, and finally the above-mentioned "no card opening for five years, no non-counter opening for three years" and other similar punishments will appear.

On September 18, Guangxi Public Security Bureau and Nanning Branch of the People's Bank of China announced the first list of 1,091 people who bought and sold bank accounts, requiring that the punished individuals will have their non-counter bank account transactions and payment account transactions suspended for five years and will not be allowed to open new accounts. Other cities that were also announced included Quanzhou, Putian, Wenzhou, Laibin, etc.

Guangxi is a place where pyramid schemes are common. On May 20, a Nanning OTC trader was arrested by the police for allegedly assisting telecom fraud criminals in money laundering. See "Exclusive: Suspected Nanning OTC trader arrested for allegedly using USDT to help telecom fraud criminals launder money"

Although some OTC traders have been included in the disciplinary list, the current public information emphasizes more on "suspected cases of buying and selling accounts, opening accounts in the name of related units and individuals, and new types of illegal crimes in telecommunications networks." However, such behavior often occurs in OTC transactions of cryptocurrencies. Some merchants engaged in RMB OTC will require employees to use their personal bank cards to conduct transactions.

Huobi, the largest OTC platform, has recently carried out a wave of PR, conveying the message that normal cryptocurrency transactions are not illegal, and only those involving black money and black industries will be frozen. It also stated that Huobi has carried out a lot of technical prevention and control in this regard.

But in fact, due to the lack of corresponding rules and regulations, financial institutions have different standards for judging cryptocurrency transactions. For example, the strict CMB has always considered cryptocurrency transactions as part of anti-money laundering. In 2018, CMB Hong Kong Branch issued an announcement: According to relevant requirements, CMB Hong Kong Branch may terminate the use of customer accounts if it is found that transactions involve virtual currency.

Industry insiders pointed out that, judging from the current situation, it is not only the black money involved that will be frozen, the act of buying and selling cryptocurrencies itself may also trigger the bank's risk control mechanism. However, the latter is relatively controllable for individuals, and there is less chance of complete freezing; for OTC merchants, they have to use other people's accounts, but this may be investigated again, or even put on the "blacklist."

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