Mutual Gold Association: Risk Tips on Participating in Speculative Hype of Overseas Virtual Currency Trading Platforms

Source of this article: China Internet Finance Association

In 2017, the People's Bank of China, together with the Central Internet Information Office and other seven departments, issued the Announcement on Preventing the Financing Risks of Token Issuance, clarifying that virtual currency transactions and ICO activities are illegal financial activities, and carried out cleanup and rectification work.

To avoid regulatory crackdowns, some virtual currency trading platforms register or set up servers overseas and continue to engage in related activities. These platforms often attract consumers' attention with various gimmicks. For example, the international financial market has fluctuated recently. Some platforms have begun to hype the concept that "virtual currencies are safe-haven assets beyond gold and silver." The actual situation is that their prices have fallen sharply. Consumer losses are severe. Not only that, these platforms also use robot programs to brush and tamper with data to create the illusion of "prosperity" in the virtual currency trading market. By sampling and analyzing the transaction data of some platforms, the daily turnover rate of more than 40 virtual currencies exceeds 100%, and the daily turnover rate of more than 70 days exceeds 50%. Huge transaction volume, as well as platforms that directly use crude methods to crawl other platform information, completely copy the fake transaction volume.

After inducing consumers to enter the market, the platform will use various market manipulation methods to encroach on consumer property. First, without consumers 'knowledge, the platform invaded consumers' property through malicious operating procedures such as buying high and selling low, and high-frequency trading. The second is that the platform uses horizontal, pull, and other technical means to manipulate the transaction, and consumers do not know the actual transaction situation. Third, the platform often stagnates transactions suddenly by means of downtime, unplugging cables, freezing assets, etc. Consumers involved in leveraged transactions can suffer heavy losses because they cannot actively close their positions and cause liquidation.

It should be noted that due to “going overseas” operations, the operating entities of these platforms are relatively hidden. By frequently changing website domain names and server addresses, and adopting online diversion and offline transactions, they have avoided the crackdown of regulatory authorities. , Office locations and business development areas are often different, consumers are often unable to determine the identity of the operator, and it is difficult to recover property losses once they occur.

To this end, the China Internet Finance Association solemnly reminds that any institution or individual should strictly abide by national laws and regulatory requirements, and not participate in virtual currency trading activities and related speculation. Member institutions should also abide by the industry's self-regulatory requirements and take the initiative to resist illegal financial activities without providing convenience. Consumers should proactively enhance their awareness of risk prevention and self-protection, and do not blindly follow the trend to participate in relevant speculation. If any institution is found to be involved in such illegal financial activities, report it to the relevant regulatory authority or the China Internet Finance Association in time, and suspect it of illegality Anyone who commits a crime shall promptly report the case to the public security organ.