Organizing and shielding digital virtual currency at sea

1. There are two reasons for the prohibition of virtual currency trading by the state:
1. The price fluctuates violently and the consumer protection is lacking:
virtual currency is the proct of network, and the digital information flowing in the network is beyond the control of all people. The code of cyberspace is the basis of the operation of virtual currency, investors can only operate through the front-end interface, seemingly "control" the virtual currency. The operator of the virtual currency service organization may become the actual controller of the virtual currency through the control code<
2. Avoiding supervision and becoming the "accomplice" of criminal activities
virtual currency transaction is not protected by law:
virtual currency transaction is not illegal, and it is not illegal to invest in virtual currency. But how to get involved in virtual currency transactions is illegal and illegal. It may be suspected of illegal fund-raising.

2.

One is to block the "going to sea" virtual currency trading platform. As of May 2018, 110 websites, including hot coin.com and coin.com, have been blocked

Fourthly, risk warning and public opinion guidance should be actively carried out. Together with the China Internet Finance Association, we remind the public to be highly alert to the risks and hazards of virtual currency related activities through various channels and forms

Fifthly, we should actively support and cooperate with the public security organs to crack down on all kinds of fake virtual currency and related illegal fund-raising, fraud, pyramid schemes and other activities. According to the statistics of public security organs, in recent years, nearly 300 cases of virtual currency crimes have been filed and investigated

3.

There are two reasons for the prohibition of virtual currency trading by the state:

1. The price fluctuates violently and the consumer protection is lacking:

virtual currency is the proct of network, and the digital information flowing in the network is beyond everyone's control. The code of cyberspace is the basis of the operation of virtual currency, investors can only operate through the front-end interface, seemingly "control" the virtual currency. The operator of the virtual currency service organization may become the actual controller of the virtual currency through the control code

bitcoin and other so-called "virtual currencies" lack a clear value basis, the market is full of speculative atmosphere, the price fluctuates violently, and investors blindly follow suit, which is easy to cause capital losses

2. Evade supervision and become the "accomplice" of criminal activities:

bitcoin is popular as a payment tool in the so-called "dark web" world“ The "dark net" is full of all kinds of serious criminal activities. One of the original intentions of the invention of bitcoin is to evade regulation. It has the characteristics of anonymity and convenient cross-border flow, and has become the preferred tool of "underground economy"

the existence of bitcoin and exchanges and other instrial chains has constructed a illegal financial market for asset transfer and financing in addition to legal currency, increased the difficulty of regulatory authorities in managing financial security and stability, and promoted regulatory arbitrage and financial crimes. The risks and social security risks it brings to the financial market are far higher than its innovative value

extended information

virtual currency transactions are not protected by law:

according to the notice on preventing bitcoin risks issued by the people's Bank of China and other departments on December 3, 2013 and the announcement on preventing financing risks of token issuance issued by seven ministries and commissions including the people's Bank of China on September 4, 2017, virtual currency is not issued by monetary authorities, It is not a real currency because it does not have the monetary attributes of legal compensation and compulsion

in terms of nature, virtual currency should be a specific virtual commodity, which does not have the same legal status as currency, and can not and should not be used as currency in the market. Although citizens' investment and trading in other virtual currencies are personal freedom, they can not be protected by law

4.

On March 28, the central bank held a national teleconference on monetary gold and silver work in 2018. Fan Yifei, vice governor of the people's Bank of China, pointed out that we should further strengthen reform and innovation and solidly promote the research and development of digital currency of the people's Bank of China. We should strictly strengthen internal management and external supervision, attach great importance to and effectively strengthen the quality control of RMB, carry out large amount cash management, build a cash clearing enterprise supervision system in accordance with the law, carry out the rectification and clean-up of all kinds of virtual currencies, and strive to build a "five in one" anti-counterfeit currency working mechanism

from the perspective of global digital currency regulatory practice, China has adopted a more stringent regulatory approach, but it does not mean that China can stay out of the global financial innovation wave. In the future, China should actively participate in the global governance of digital currency and enhance its influence and voice in the development of digital currency and regulatory rules

5.

With regard to the digital currency which has soared tens of thousands of times before, various policies and news are constantly emerging. Bitcoin fell from the highest point of 130000 to about 40000, and Shanzhai digital coin even fell to 99%. But Xiangge said that the transaction will not end, but there will be periodic fluctuations. In the news of China financial news network, I communicated with senior people in the currency circle for the first time. When the news is all over the place and people are in a panic, the more we need to listen to the ideas and opinions of professionals. My friend, a Xiong, CEO of digital exchange, has experienced the whole process of digital currency take-off, development and adjustment. His current project is digital currency trading platform and related intelligent investment consultant. His thoughts and opinions are summarized as follows:

6. Metro Sports Center exit D2

7. It is impossible to judge whether it is pyramid selling only by a trade name or a proct name. To judge whether it is MLM or not, we need to analyze the legal connotation of this behavior from a legal point of view. If the following conditions are met, it belongs to MLM< According to the "Regulations on the prohibition of pyramid selling":
Article 2, pyramid selling refers to that the organizer or operator's development personnel seek illegal benefits by calculating and paying remuneration to the developed personnel based on their number of directly or indirectly developed personnel or sales performance, or requiring the developed personnel to obtain the qualification of joining in the condition of paying a certain fee, Disturbing economic order and affecting social stability< Article 7 the following acts belong to pyramid selling:
(1) organizers or business operators, through development personnel, require other personnel developed by the development personnel to join in, and calculate and pay rewards (including material rewards and other economic benefits, the same below) to the development personnel based on the number of personnel developed directly or indirectly, so as to seek illegal benefits
(2) the organizer or business operator, through the developer, requires the developed person to pay fees or pay fees in disguised form by way of subscribing for commodities, so as to obtain the qualification of joining or developing other persons to join and seek illegal interests
(3) the organizer or business operator, through the development personnel, requests other personnel developed by the development personnel to join, forms the relationship between the upper and lower line, and calculates and pays the online remuneration based on the sales performance of the lower line, so as to seek illegal interests
in the regulations on the prohibition of pyramid schemes, the concept of hierarchical relationship is repeatedly mentioned. The hierarchical relationship formed by certain rules is only a phenomenon in many pyramid schemes. It must be related to the illegal possession of other people's property before it can be suspected of pyramid schemes.

8. Recently, regulators have further strengthened the supervision of cryptocurrency. A few days ago, the central bank took the lead in holding a forum with many ministries and financial offices in many places to study and deploy the next stage of rectification work of virtual currency "mining" and OTC trading. According to the arrangement of the meeting, we will focus on sorting out and rectifying the OTC trading places or platforms registered in China (including setting the website platform overseas in the form of "going to sea" to continue to provide trading services for domestic users), service providers providing guarantee and clearing for OTC transactions, and institutions or indivials providing market making services for large amount of "point-to-point" transactions online or offline, And block its trading service website and app located abroad. Regulate and rectify bitcoin mines, and guide related enterprises to exit in an orderly manner. In addition, Payment institutions that provide payment services for the above-mentioned OTC transactions will require self inspection and rectification, and shall no longer provide payment services for virtual currency transactions
this joint rectification action focuses on the following four types of online pyramid selling activities: first, online pyramid selling activities under the guise of "consumption rebate", "mutual fund assistance", "virtual currency", "investment and financial management" and "online games"; Second, under the pretext of "charity", "poverty alleviation", "innovation", "equal wealth" and "civil military integration", the online pyramid selling activities deliberately distort the relevant national policies; The third is the network pyramid selling activities that infringe on the students, the minimum living allowance, the disabled and other vulnerable groups; Fourth, the implementation of cross-border manipulation of network pyramid selling activities. At the same time, the core members, backbone members and "professional" participants of online pyramid selling organizations, as well as those who help transfer funds and provide website design and maintenance, shall be seriously investigated and dealt with in accordance with the law
for reference.

9.

On July 6, it was learned from the people's Bank of China that since September last year, the central bank, together with relevant departments, has searched out 88 domestic virtual currency trading platforms and 85 domestic initial token issue financing (ICO) trading platforms, and basically realized risk-free exit, with the global share of bitcoin Trading in RMB falling to less than 1%

in view of the new varieties and new situation of the recent illegal financial activities, the relevant regulatory authorities organized to block the "going to sea" virtual currency trading platform and resolutely crack down on the ICO's emergence and various varieties. As of the end of May, 110 websites of trading platforms, including huocoin.com and coin.com, had been blocked

at the same time, the regulatory authorities continue to strengthen the liquidation and rectification from the end of payment and settlement, and have interviewed many non bank payment institutions such as Cai Fu Tong and Alipay for many times, demanding that they strictly implement the requirement that they should not carry out related businesses such as bitcoin and other virtual currencies. At present, Alipay has investigated and shut down about 3000 accounts for virtual currency transactions. p>

10. 09:05, September 17, 2018 source: People's Daily - International Financial News
http://capital.people.com.cn/n1/2018/0709/c405954-30134178.html
the central bank resolutely cracked down on ICO and blocked 110 offshore virtual currency trading platforms. As of May 2018, 110 websites (including trading platforms such as huocoin.com and yuanan.com) have been blocked.