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Original title: "Draw the sword against virtual currency! Regulators in many places took action, Binance and Tron's official accounts were blocked, and digital currencies collectively fled"
Original source: CCTV Finance
Recently, regulators in Shanghai, Beijing, Dongguan, Hangzhou, Shenzhen, Henan and other places have "drawn their swords" to conduct a thorough investigation of digital currency trading-related activities. At the same time, Binance and Tron's official Weibo accounts were blocked. In addition, Beijing police recently cracked down on an illegal digital currency exchange BISS (Coin Market) and classified it as an illegal fundraising fraud. This is the first case in the cryptocurrency circle where all employees of a virtual currency exchange were shut down. An industry insider close to the regulatory authorities revealed to reporters: "The wave of arrests in the cryptocurrency circle has just begun."
Affected by the news, in the past 24 hours, the price of Bitcoin has plummeted to its lowest level in 6 months, falling below $7,000 and as low as $6,790.
Previously, a reporter from Securities Times reported in depth on the chaos of coin issuance by cryptocurrency exchanges (for details, please click: Crying about getting rich 100 times on Double 11! An investigation into the chaos in the cryptocurrency circle amid the blockchain craze: air coins, recruiting people, cutting leeks, and fake "exchanges" running rampant). People's Daily, Xinhua News Agency, CCTV.com and many other media also focused on the chaos in the blockchain, calling on investors to be wary of digital currency scams.
It is worth mentioning that many digital currency exchanges in the market have begun to reduce publicity and have told group members to keep a low profile recently. Not only that, a batch of altcoins have been removed from the market, which means that the assets of these altcoin investors have instantly returned to zero. "We called the police, but the victims are scattered all over the country, and the police will not accept the case." A cryptocurrency trader told reporters.
Digital currencies collectively plummeted, with Bitcoin falling below $7,000▲▲▲
In the past 24 hours, digital currencies have collectively plummeted. According to Binance's market software, Bitcoin has fallen to as low as $6,790, the lowest level in six months. As of press time, the price of Bitcoin was $7,244, down $410.63 in 24 hours, which means that RMB 2,874 evaporated from one Bitcoin.
According to information and trading platform CoinMarketCap.com, the top ten digital currencies by market value fell collectively on Friday and suffered a bloodbath.
Big Cleanup Operation! The "Net Cleanup" of Virtual Currency Continues
Recently, with the promotion of blockchain technology, virtual currency speculation has shown signs of rising. Some companies have organized virtual currency transactions in the country in the name of "blockchain innovation"; issued virtual currencies in the form of "xx coins" and "xx chains" on the grounds of "blockchain application scenarios" to raise funds or virtual currency assets such as Bitcoin and Ethereum; provided publicity, traffic diversion, and agency trading services for ICO projects and virtual currency trading platforms registered overseas, and even some illegal institutions have issued or promoted legal digital currencies in the name of the People's Bank of China, and defrauded investors of their money under the gimmick of "legal digital currencies".
On November 10, a Securities Times reporter conducted an in-depth report on the chaos in the cryptocurrency circle. Many media outlets, including People's Daily, Xinhua News Agency, and CCTV.com, also called on investors to be wary of digital currency scams.
Recently, regulators in Shanghai, Beijing, Dongguan, Shenzhen, Hangzhou, Henan, Inner Mongolia and other places have also "drawn the sword" to conduct a survey and investigation into the activities related to digital currency exchanges.
On November 11, the Department of Industry and Information Technology of the Inner Mongolia Autonomous Region issued a notice on a joint inspection of the cleanup and rectification of virtual currency "mining" companies. The notice stated that the autonomous region's joint inspection team went to some leagues and cities to conduct a joint inspection of the cleanup and rectification of virtual currency "mining" companies.
The main content of the inspection is to focus on identifying virtual currency "mining" companies that have nothing to do with the real economy, evade supervision, consume a lot of energy, and use the "big data industry" as a package to enjoy preferential policies in local electricity prices, land and taxes.
On November 13, the Beijing Local Financial Regulatory Bureau issued a "Risk Warning on Trading Venue Branches Conducting Business Activities Without Approval."
The "Notice" clearly states: "If any branch of a foreign trading venue (mainly financial asset exchanges) conducts business activities in Beijing, it is considered illegal business behavior."
In fact, almost all digital currency exchanges operating in China have their servers located overseas and have registered shell companies overseas. Strictly speaking, they are all "foreign trading venues."
On November 14, under the leadership of the Shanghai Internet Finance Regulation Office, the Shanghai Financial Stability Joint Office and the Shanghai Headquarters of the People's Bank of China jointly issued the "Notice on Conducting a Survey and Regulation of Virtual Currency Trading Venues."
The notice shows that the focus of this rectification is virtual currency-related activities, including virtual currency transactions, coin issuance and fundraising, as well as providing publicity and traffic diversion for exchanges registered overseas. According to the relevant deployment of the National Internet Finance Regulation Office, the Internet Finance Regulation Offices of each district under its jurisdiction will conduct a survey of virtual currency-related activities and complete the work before November 22.
On November 21, the Office of the Leading Group for the Special Rectification of Internet Financial Risks in Shenzhen issued a risk warning on preventing illegal activities involving "virtual currency" and notified the rectification offices of various districts, the Qianhai Authority, the Shenzhen Branch of the People's Bank of China, the Economic Investigation Bureau of the Municipal Public Security Bureau, the Municipal Communications Administration and other units to jointly carry out inspections and rectifications of virtual currency trading venues.
It is reported that this operation will focus on investigating three types of activities: one is to provide virtual currency trading services or open virtual currency trading venues within the country; the second is to provide service channels for overseas virtual currency trading venues, including traffic diversion, agency buying and selling services, etc.; the third is to sell tokens under various names to raise funds or virtual currencies such as Bitcoin and Ethereum from investors.
The latest information shows that the Shenzhen Local Financial Regulatory Bureau has identified 39 companies suspected of engaging in illegal virtual currency activities through the Lingkun system.
Currently, the official Weibo accounts of two of China’s three major digital currency exchanges have been blocked.
On November 13, Binance’s official Weibo account was blocked due to violation of laws and regulations and the Weibo Community Convention, and is now unavailable for viewing. It is worth noting that when Binance’s official Weibo account was blocked, the content and number of followers in its account were also cleared.
On November 15, TRON’s official Weibo account “TRON Official Weibo” was blocked. The page showed that the account was no longer accessible due to complaints of violating laws and regulations and relevant provisions of the Weibo Community Convention.
In addition, according to the reporter's understanding, the Beijing police cracked down on the illegal digital currency exchange BISS in one fell swoop, classified it as an "illegal fundraising fraud", and arrested dozens of criminal suspects, even interns who had been employed for several months.
It is worth mentioning that recently all major exchanges have started to remove altcoins in batches. For example, the Biki exchange reported by the Securities Times reporter responded to the public after the report was issued, saying that the company has already removed the first batch of currencies that do not meet the standards, and will remove the second batch of currencies in the near future. This also makes people have to question Biki's qualification review of the project party when issuing tokens.
The mass delisting of cryptocurrencies means that the cryptocurrencies cannot be traded, and all the money invested by the speculators will be reduced to zero. One speculator told the reporter, "After the delisting, who can we ask for compensation for our losses? We went to the police, but they didn't accept the case because the investors are scattered all over the country and it is difficult to report to the police together."
The leading exchange Binance has also recently begun to remove some altcoins, and many of the delisted virtual currencies were only recently listed.
Some cryptocurrency traders told reporters that in recent times, there have been news reports almost every day that certain virtual currency exchanges cannot withdraw money.
On November 6, GGBTC, the technology-driven exchange of Gravity, was unable to withdraw money. The website was no longer accessible.
On November 6, Newton Exchange, which allows mainstream coins to be exchanged for platform coins, could not withdraw coins.
On November 11, MGEX, a copycat of PLUS TOKEN that earns interest on deposits, could no longer withdraw funds.
An industry insider told reporters that "even if the virtual currency exchanges do not want to shut down and run away, they will be run and go bankrupt. After all, in addition to collecting mainstream coins, some virtual currency exchanges also produce their own platform coins (air coins). Where can the exchanges find so many mainstream coins and cash reserves for investors to run on? After all, exchanges are not banks and do not have reserves."
It is called a virtual currency exchange, but it is actually a "funding platform" ▲▲▲
According to cryptocurrency traders, after BiKi was reported by mainstream media, another popular exchange also used resonant coins such as VDS and air coins to conduct two-way harvesting. The boss behind the exchange, Chen Jian, used his own market value management and secretly established rat warehouses to frequently harvest investors and project parties. Currently, the technical office of this exchange in Chengdu has also been investigated by the Chengdu Economic Investigation Bureau, but the founder Chen Jian is no longer in the country.
Public information shows that as of now, this exchange has launched more than 165 currencies and 220 trading pairs. However, in August 2018, the number of currencies launched on this exchange was only 34, and most of the non-mainstream currencies have now been removed from the shelves.
On November 22, the exchange platform also delisted multiple altcoins.
The history of this exchange can be traced back to April 2018, but at that time the entire virtual currency circle was in a bear market due to domestic regulation, so this exchange has been tepid. In February 2019, the exchange changed its strategy and launched the VDS resonance coin. Two months after its launch, VDS rose nearly 20 times. Exploring the model of VDS, its main means of transaction is to exchange Bitcoin for VDS coins, and at the promotion level, it adopts a typical pyramid scheme model. On the one hand, the coin price is guaranteed to soar, and on the other hand, it is a pyramid scheme promotion, pulling people in to take over. The launch of VDS has brought a lot of traffic to this exchange.
After VDS, this exchange successively launched a variety of resonance coins such as LDS, HDS, FDS, etc., with the same routine. However, these resonance coins have been questioned by the market from the beginning to the end as having no actual value. They are called resonance, but they are actually "Ponzi schemes". This exchange has also begun to be called a "Ponzi scheme exchange."
Resonance is a new "financing" model in the currency circle, which was first proposed by the VDS project. The core gameplay of VDS lies in "resonance bitcoin". Simply put, users exchange bitcoin for "VDS" in a one-way manner. The earlier people participate in the resonance, the higher the proportion of resonance coins they exchange. It decreases each time until the resonance ends. Therefore, this is a typical pyramid structure of pyramid selling. The earlier people participate, the lower the risk and the higher the return. Once the resonance ends, the number of participants decreases, and the big players have absorbed enough chips, they will start to smash the market.
After seeing the actual benefits of VDS on this exchange, Biki also started to launch VDS, relying on pyramid schemes to attract traffic. After Biki launched VDS, it experienced a short surge, reaching a high of $12 before falling sharply. As of November 23, the price of VDS was $0.613 (about RMB 4.877), with a cumulative decline of up to 95%.
Biki CEO Li Xiandong boasted about his star project VDS in his circle of friends. The total issuance volume is 2.1 billion, and the fundraising amount exceeds 1.3 billion yuan. Li Xiandong said that its actual daily trading volume exceeds 20 million yuan.
Most of the currencies on the above two exchanges were launched after February 2019, and after a crazy listing of currencies, they have recently started to delist currencies crazily.
In response to Biki’s launch of controversial altcoins such as VDS, Li Xiandong once said in an interview that survival is the key and that innovation should be tolerated.
"It is only a matter of time before the cryptocurrency industry is strictly investigated. The proliferation of fake exchanges and fake technologies disguised as "blockchain" have caused the cryptocurrency industry to suffer from the situation of "leeks crying" time and time again. What's more, exchanges like Binance, BIKI, and this exchange have always been full of negative news and should have been strictly investigated and punished long ago." A cryptocurrency industry insider told reporters.
BlockBeats reminds that according to the document "Risk Warning on Preventing Illegal Fund Raising in the Name of "Virtual Currency" and "Blockchain"" issued by the China Banking and Insurance Regulatory Commission and other five departments in August 2018, the general public is requested to look at blockchain rationally, not blindly believe in the exaggerated promises, establish correct monetary concepts and investment ideas, and effectively enhance risk awareness; any clues of illegal and criminal activities discovered can be actively reported to the relevant departments.
Source link: https://weibo.com/ttarticle/p/show?id=2309404442157502038023
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