The three major Bitcoin platforms that illegally carried out financing and currency lending business shut down leveraged financing

According to the Yangtze Business Daily , on January 18, the relevant person in charge of the Shanghai headquarters of the People's Bank of China released the results of the recent on-site inspection of "Bitcoin China", reminding institutional and individual investors to pay great attention to the risks and hidden dangers of the platform and safeguard their own property safety. The person in charge said that the preliminary inspection found that the "Bitcoin China" trading platform had problems such as operating beyond the scope of business, illegally carrying out margin trading, and investors' funds not being deposited by a third party.

The People's Bank of China's Business Management Department announced on the same day that since the joint investigation team entered "Bihang" and "Huobi.com", it has initially found that these Bitcoin trading platforms have violated regulations in conducting margin trading and securities lending businesses, leading to abnormal market fluctuations. In addition, these platforms have not established relevant anti-money laundering internal control systems in accordance with regulations.

Industry insiders said that the so-called illegal financing and currency lending business actually refers to leveraged financing. Bitcoin China, Bihang, Huobi.com and other three Bitcoin exchanges have currently stopped related leveraged businesses.

Previously, the above three bitcoin exchanges all provided margin trading services, which can be said to be a common business among bitcoin exchanges. Generally speaking, the leverage ratio is between 3 and 5 times, and the platform charges a fee of 0.1% to 0.5%. A senior industry insider told reporters that once the exchange stops leveraging, it is very likely to resume charging transaction fees, "which will become the main source of revenue for the exchange after the leverage is stopped."