【Virtual Currency】Virtual currency welcomes the "9·24" critical node

The virtual currency market is facing a dual heavy impact from regulation and market trends. The central bank, the China Banking and Insurance Regulatory Commission, and ten other ministries jointly issued a notice on "Further Prevention and Handling of Risks Related to Virtual Currency Trading Speculation," clarifying that virtual currencies like Bitcoin and Ethereum do not possess the status of legal tender, and related business activities are deemed illegal financial activities, which will be strictly banned according to law. On the same day, the National Development and Reform Commission classified virtual currency "mining" as an industry to be eliminated, completely prohibiting any form of mining activities, stopping financial support, and incorporating it into credit supervision.

This round of regulation presents unprecedented intensity and precision: for the first time, it includes judicial authorities such as the Ministry of Public Security, the Supreme Court, and the Supreme Procuratorate, defining the activities of foreign trading platforms within the country as illegal and clarifying that those involved may face criminal charges. The policy adopts a hierarchical and classified rectification model, implementing layer by layer from the central to the county and township levels, directly targeting specific scenarios such as abnormal electricity usage in data centers to close regulatory gaps. This is seen in the industry as an upgrade and continuation of the "9·4 ban" in 2017 and a closure to the 19 regulatory policies since May.

The rapid implementation of the policy has triggered severe market fluctuations. Bitcoin plummeted 8% in a single day, while mainstream cryptocurrencies like Ethereum and Litecoin also fell in tandem, with total contract liquidations across the cryptocurrency network reaching 1.7 billion USD in 24 hours, affecting over 400,000 people, with the largest single liquidation amount nearing 100 million RMB. U.S. stocks related to cryptocurrencies faced collective pressure, with companies like Coinbase seeing pre-market declines of over 3%.

It is noteworthy that under the high-pressure regulation, the judicial disposal system continues to improve. Taking recent cases disclosed by the Shanghai High Court as representatives, the model of "domestic entrustment, overseas disposal, closed-loop return" will convert the involved virtual currencies into cash through compliant foreign exchanges and deposit them, forming a standardized disposal pathway. This progress marks a shift in China from banning transactions to regulating aftermaths in virtual currency risk disposal.

Analysis indicates that this regulatory storm considers both financial security and the "dual carbon" goals, making the trend of clearing virtual currency trading and mining a settled matter. For investors, the combination of market fluctuations and legal risks makes the cost of irrational speculation increasingly high.