People's Financial Review: Is virtual currency a safe-haven asset beyond gold and silver? fake!

Article source: People's Network

Affected by the new crown epidemic, the international financial market has fluctuated recently. In this special period, ordinary people are particularly vulnerable to false information, giving criminals more opportunities. Some trading platforms have taken the opportunity to speculate that "virtual currency is a safe-haven asset that surpasses gold and silver". The essence of it is that speculators trick consumers into participating in virtual currency transactions in order to make profitable consumption traps.

Recently, the China Internet Finance Association issued the "Reminders on the Risks of Participating in Speculation on Overseas Virtual Currency Trading Platforms", once again warning consumers not to participate in virtual currency trading activities and related speculations.

In 2017, the People's Bank of China and seven departments issued the "Announcement on Preventing the Risk of Token Issuance and Financing", which clearly pointed out that virtual currency transactions and ICO activities are illegal financial activities. With the continuous deepening of domestic rectification work, some virtual currency trading platforms continue to engage in related illegal activities through overseas registration and other means to circumvent supervision, infringing on the legitimate rights and interests of consumers. Therefore, investors must keep their eyes open, see the traps under the surface in time, and protect their own interests.

• Economic Daily: How deep is the “water” of virtual currency trading? The plunge is just one of the many risks behind it
• Cao Yin: An economic crisis or an important opportunity for the rise of DeFi in an epidemic
• Governor of the United Bank of the Philippines: The new crown virus epidemic will accelerate the adoption of central bank digital currency

Investors should clearly see that the price of the virtual currency market fluctuates sharply, hiding huge risks that are unbearable. Taking Bitcoin as an example, it reached a high of $ 10,500 in mid-February, but by mid-March it had fallen below $ 4,000, and the price fell by 63% in just one month. Among them, the day of March 12 fell by nearly 39%. It can be seen that the virtual currency market is not a safe-haven market.

Investors should be soberly aware that the virtual currency trading market is a thorough speculative market that stays out of the sight of conventional supervision. Market manipulation and other illegal issues are serious. Some virtual currency trading platforms evade domestic supervision by setting up servers overseas, changing their registration locations overseas, and at the same time, founders and key members of the team are based overseas. But the transaction funds still come from China, and most of the investors are ordinary domestic investors. Due to the lack of effective supervision, the methods of speculation that exist in the secondary market of stocks are more prominent in the virtual currency market, and leveraged investment and over-the-counter capital allocation are common. Even some platforms directly manipulate market prices through various means, unilaterally change the trading mechanism, freeze and embezzle customer funds, and so on.

Investors should clearly understand that disputes over investing in virtual currencies are likely to face practical problems such as no complaints, difficulty in court and arbitration acceptance. In addition, because of the anonymity of virtual currency, it is naturally friendly to the underground economy, illegal transactions or gray transactions, and there are many illegal activities such as money laundering, tax evasion and bypass of capital control in the virtual currency market. It is difficult to recover once the property loss occurs .

Investors should be wary of all kinds of false information that flood the market. Due to the lack of financial knowledge and low risk awareness of ordinary investors, it is easy to be deceived by false news that some institutions and platforms intentionally spread. In addition, during the epidemic, criminals are also very easy to use everyone ’s panic to create illusions and induce investors to buy virtual currency blindly. For this, we must increase risk awareness.

Investors should be alert to the malicious hype of individual media. In recent years, the purchase of virtual currency can become rich overnight, realize wealth freedom, and be able to counterattack the marriage of Bai Fumei abound. These wrong, negative and even distorted values ​​have been widely publicized and brought great influence. Ordinary investors lost their correct view of wealth. In addition to investors must keep a clear head, the relevant regulatory authorities should also firmly combat this.

We urge that on the basis of continuously strengthening investor education, the regulatory and law enforcement departments should further severely punish illegal activities such as illegal fund-raising, financial fraud and money laundering around virtual currencies; increase the management of publicity and promotion content in related fields; build smooth, Fast and effective complaint reporting channels build a firewall for the legitimate rights and interests of financial consumers.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!