Digital asset management chaos: institutional chaos recovery

In the digital currency market, investors need to face the risk of a short-term surge, but also need to face the dilemma of the project side when the problem occurs, while the latter brings direct assets to zero.

It was more than half a month since the initial bitter partner Zhang Wei (Zhang Yuming) first revealed that "Beta Yi founder Hui Xi died on June 5, 2019." After the initial mourning, Biti has been stuck in "The borrower suicide illegally encroached on the huge assets of investors" in the paradox of public opinion.

According to Caijing.com, Bitcoin investors set up relevant groups to discuss the solution together at the first time. The group has more than 100 members, but so far, no effective way to recover losses has been obtained.

On the same day as the news that “Hui Wei has committed suicide”, the digital asset management platform TokenStore is suspected of deliberately shutting down the platform and embezzling user assets. Since then, according to the digital currency security platform PeckShield monitoring multiple target assets in TokenStore found that more than 78 million yuan of funds have been transferred in TokenStore, some of which have already flowed into the exchange.

Although all relevant exchanges have indicated that they have taken relevant measures through public channels, it is clear from the follow-up of similar incidents that the relevant measures taken by the exchanges have little significance for investors to recover losses.

A series of routines such as stopping operations for no reason, maliciously embezzling user assets, false propaganda, pyramid-selling promotion, and fund-distribution games have already been played in the currency circle. It is known that many similar incidents can cause huge losses for investors before 2019. Most of the cuts of leeks occurred on the currency project side, such as the CDC event in 2018 and the Skycoin event. In 2019, digital asset management products also became a sharp "sickle."

According to Caijing.com, the current digital and monetary wealth management products on the market can be roughly divided into three types, namely, borrowings, funds, and quantitative funds, and the yields of these products have always remained high. After the financial network researched the market, It is found that a high 20% yield is not uncommon for digital currency wealth management products.

However, with the changes in market form and regulatory situation, these high-yield wealth management products are all hidden hidden points. Once triggered, investors will lose their money.

BitEasy, TokenStore's huge amount of money goes to the fans

Before June 10, the news of Huixi’s death has not yet been broken by Zhang Wei, and Biti’s investors have discovered the anomaly of Biti.

According to a Bitco investor, in May of this year, the Bitcom system stopped updating, and the employees of the group were no longer responding to relevant information. In June, Biti’s office address was found to have gone. The building is empty.

In a few days, Hui Yi was killed in the office after meeting with Zhang Wei, and the digital assets invested by investors in the name of investment quantitative funds to Biti were also missing.

According to public information, since October 2018, Biti has publicly raised two quantitative funds. In the second fund's poster, Biti claimed that the first quantitative fund's three-month yield reached 79%. .

But the fact is, as of now, there has been no news that investors with Bit Easy Quantitative Fund products have successfully recovered their investment assets. A person who claims to be a student of the Huizhou Cheung Kong Graduate School of Business said that Bitco has raised more than 100 million yuan through the quantitative fund.

According to a news report from the media, this money has partially entered Zhang Wei’s personal account. In this regard, Zhang Wei did not give any explanation, and the corresponding one is that the employees of Biti are almost all overnight. All the Biti employees who were previously active in the community no longer speak.

In addition, as of now, investors have not yet figured out the real reason for Huiyu’s suicide. Previously, NetEase was suspected of having a 100-fold leveraged position and lost about 100 million yuan (2000 BTCs). He eventually chose to commit suicide. However, it is not in line with the actual operation of the financial network to verify that it is OKEX. For example, a 100-fold leveraged position can only open 1,000 orders, and the margin ratio is maintained at 0.5%. It can be seen that the claim that “Huiyi lost 2000 BTC due to 100 times leverage” is not accurate.

The above-mentioned person who claims to be from Huizhou Cheung Kong Business School said that from the Huiyi transaction situation he knew, Huiyi only opened 20 times leverage. In addition, according to the statistics of the person, the amount involved is not 2000 BTCs transmitted by net, but at least 3,000 BTCs (current price over 200 million yuan).

At present, Bitcom's investors are seeking help from many parties, but it has been half a month since the incident and still have not found any effective solutions.

On the morning of June 10th, the main person in charge of TokenStore China, Niu Niu (this is WeChat nickname) said in the investor group, "I am very sad to tell you that TS may be really gone."

Immediately, the message "TokenStore is suspected of running" was quickly spread. Previously, TokenStore announced on May 31 that the system will be fully upgraded and maintained for 10 days due to hacker attacks. After 10 days, TokenStore investors did not wait for the platform to resume normal operation, but found that the platform or the funds have been rolled. Run the road.

At present, the TokenStore official website is no longer accessible, and the App Wallet cannot perform operations such as transfer and transaction.

Similar to the Bitcom event, TokenStore's related personnel are also “evaporating” after an accident, and investors cannot find the exact responsible person. According to statistics from the blockchain media Babbitt, the amount involved in the incident may have reached billions of yuan.

However, unlike the Bitcom event, the data monitoring agency found that the funds in the TokenStore are gradually shifting, and some of the funds have been transferred to the digital currency exchange for trading.

Digital currency management

"The current cryptocurrency market can be worthy of the first year of the 2013 online loan. At that time, the regulation has not yet been introduced, and the market is not standardized. Moreover, the cryptocurrency is not a legal currency after all, and the value of the currency itself is very unstable. There are many opportunities for speculation, and the yield is naturally high.” Zhang Qi, the head of the quantitative management team of a cryptocurrency exchange, told Finance Network.

Caijing.com understands that the current digital and monetary wealth management products on the market can be roughly divided into three types, namely, borrowing, capital, and quantitative funds. However, despite the different forms of these three types of wealth management products, the profit model behind them is Consistently, the wealth management product team is mainly profitable by quantitative arbitrage after getting the investor funds.

The quantitative arbitrage is divided into two types, one is the arbitrage of the same currency between different exchanges. The second is to make arbitrage between different currencies.

According to industry analysts, from the perspective of market conditions and space, it is no problem to achieve more than 10% of the benefits through quantitative means, and some excellent quantitative teams may also be market makers of exchanges, so they are on the exchange. With a very low transaction rate, the yield can be further increased.

Zhang Qi said that if it is a better quantitative team, it is no problem to annualize 100% of the income.

But the main risk of digital currency management is not the profit and loss on the books, but at other levels.

At present, digital asset management products mainly include digital asset management platforms, exchanges and wallets.

The cryptocurrency management platform is mainly a wealth management platform for ordinary investors. Most of these platforms claim to be the link between ordinary investors and professional investors, and help ordinary investors to provide professional asset management services.

In addition to the financial platform, the two parties, the wallet and the exchange, and the investors are the main players in the cryptocurrency industry. According to statistics, mainstream exchanges such as OK and Firecoin have launched their own financial plans. Some cryptocurrency wallets have also created their own wealth management products in order to compete for users.

The ultimate goal of financial management is to pay. Due to regulatory factors, the investment team of digital currency has not been formalized. Therefore, any of the three parties has a very high risk of redemption.

Laibit Mine Pool Jiang Zall also said that all currency management has a huge risk of not being able to pay.

"Between the three, it is better to do the exchange. The cryptocurrency industry is not like the current online lending industry. There is no record, no supervision, and the risk of running the encrypted asset management platform is very high. In contrast, the transaction In particular, the default costs of mainstream exchanges are relatively high." Zhang Qi believes.

At the same time, he also pointed out that the wallet is the bottleneck for financial management. "Walking a wallet is very difficult to manage money. Then there is the problem of wallet financing and getting customers. The wallet must first be put in by the user to manage the money. In the process, it must compete with the exchange and compete with the exchange. This is the first. The second layer is that professional people do professional things. The team that makes the wallet lets it quantify, find the investment target, and design the wealth management products, which itself has a big gap."

Almost all of the cryptocurrency management platforms are private investment institutions. BitEase is a private investment institution that is closely supported by Huiyi's personal brand.

These so-called investment institutions generally promote the people through the WeChat community, and then introduce these wealth management products and high profits to these "investors." Finally, send the account address to the group, and let these “investors” put the coins into the account.

"There are a lot of so-called quantitative financial management teams. Even if there are no products or websites, they all rely on their mouths to let investors give them the money." Zhang Qi said.

In addition, law and regulation are also issues that cannot be ignored in this field.

Chen Yunfeng, a senior partner of Zhong Lun Wende Law Firm, told Caijing.com that the act of raising tokens is an act explicitly prohibited by the regulatory authorities. It is essentially suspected of illegally selling tokens, illegally issuing securities, illegal fundraising, financial fraud, MLM and other illegal criminal activities. In the process of raising tokens, investment institutions largely involve illegal fundraising, pyramid schemes and fraud and other illegal and illegal risks.

"Although China's laws and regulations clearly stipulate that various tokens do not have the legal status equivalent to legal tender, this does not affect the investor's "right of action." If the fundraising agency defaults, investors can still file a lawsuit in court, even By reporting the case to protect their rights and interests." Chen Yunfeng added.

It is extremely difficult for investors to recover their losses.

But whether it is a lawsuit or a report, this road is not easy to go.

On September 4, 2017, the seven ministries and commissions jointly issued the “Seventh Department Announcement on Preventing the Risk of Subsidy Issuance Financing”. Article 5 of the announcement clearly stated that the public should be highly vigilant about the risks of financing and trading of tokens.

On September 18, 2018, the Shanghai Headquarters of the People's Bank of China issued a notice titled “Persistently Preventing ICO and Virtual Currency Trading Risks”. In this announcement, the People's Bank of China clearly pointed out speculation related to virtual currency. Seriously disrupting economic, financial and social order, ICO financing is essentially an unauthorised illegal public financing. It is suspected of illegally selling tokens, illegally issuing securities, and illegal fundraising, financial fraud, pyramid schemes and other criminal activities. .

In addition, the People's Bank of China also explicitly stated that digital asset investment has the property of skyrocketing prices. Take BTC as an example. At 7 o'clock on the morning of June 22, BTC officially broke through the $10,000 mark. Since then, the BTC market price has been standing above $10,000. According to data from the digital currency exchange, in April of this year, BTC Global quotes are still around $4,000, and in less than three months, BTC has risen more than 200%.

However, according to China's current digital currency regulatory policy, investors have the freedom to participate in digital currency trading on their own risk. That is to say, once there is a dispute in the investor’s digital currency trading behavior, especially the trading activities between some “overseas projects” and “overseas teams” related parties, it is difficult to pursue digital currency due to foreign-related transactions. It is difficult for investors to protect their rights and interests through beneficial channels. In addition, investors may face the risk of being fraudulent if they are fraudulent, bluffing or excessive publicity. It is not uncommon for hackers to steal money, exchange downtime, and project parties to illegally encroach on investors.

An investor who lost millions of dollars due to a violation of a digital currency exchange told Finance. Since a year ago, he has sought legal solutions to bring the case to court, but so far, Investors have yet to recover their losses. He believes that most of the relevant departments at present have lack of knowledge about digital currency and have concerns when dealing with related cases.

Since the financial network reported the CDC consumption chain in November 2018, it has been continuously tracking the follow-up progress. As of June 2019, there are few investors in the CDC consumer chain who have already mentioned the loss. It has actually become an advertising group.

A CDC consumer chain victim said that due to the high cost of the claim, the recovery has been abandoned.

This mentality is common among the victimized digital currency investors. According to the statistics of the financial network, whether it is the recent Bitcome, TokenStore, or the previous wave wallet, CDC consumer chain, Skycoin, PDX, Haya, For projects such as Laiyun, if no results are found after half a month of recovery, at least half of the recoverers are no longer active.

A Fcoin investor told the financial network that the confidence of the currency investors in the recovery is generally small. "Everyone will try first and will not have great expectations."

At present, digital asset investment is still a treasure trove of wealth that has not been fully exploited in many people's eyes, but it turns out that in addition to the embedding of gold in this wealthy land, there are still many risks buried, and combined with the current situation, this field There is still a long way to go for compliance. Therefore, investors should not only see the high yield on the surface when investing.

Author: Wu Yingjun

Source: Finance and Economics Network on Finance

Editor's Note: This article has been abridged without changing the author's original intent.