Why the sudden crackdown on virtual currencies? Exclusive revelation of four major truths!
Since the birth of virtual currencies, they have attracted a large number of investors with the gimmicks of "decentralization" and "high returns." However, recently, China has intensified its crackdown on virtual currency trading speculation, from shutting down trading platforms to investigating related illegal activities. A series of measures are by no means coincidental. In light of the reality that well-known trading platforms like Binance are under strict control, four core truths have emerged.
1. The financial security red line cannot be crossed: Virtual currencies are a "disaster area" for financial risks.
Virtual currencies lack real value support, and their price volatility makes them tools for speculation. More critically, virtual currency transactions are unregulated, and the flow of funds is concealed, making them prone to being a "hotbed" for money laundering, illegal fundraising, and telecom fraud activities. In previous cases of fraud investigated in various regions, criminals used virtual currencies to transfer illicit funds, posing significant challenges for police in recovering assets. Statistics show that in 2023, the amount involved in virtual currency-related criminal cases solved by Chinese police exceeded 100 billion yuan, seriously threatening the order of financial markets and the security of public property, which is also the core reason for strict crackdowns.
II. Preventing Systemic Risks: Avoiding 'Gray Rhino' events in the capital market
The virtual currency trading market lacks effective regulation, and the leverage is extremely high, with some platforms even offering leverage more than 10 times, exacerbating market volatility risk. Once the price of virtual currency experiences a significant decline, it may trigger a chain reaction of investor liquidation and platform bankruptcies, which could then transmit to traditional financial markets, causing systemic risks. In recent years, multiple virtual currency trading platforms worldwide have gone bankrupt in succession, leading to millions of investors losing all their investments. Such lessons warn our country to prevent risks in advance by strictly cracking down on them to curb the spread of risks from the source and maintain the bottom line of not allowing systemic financial risks to occur.
III. Maintaining the Authority of Legal Currency: Eliminating chaos in the 'currency circle' that impacts the currency system
Our legal currency is the Renminbi, which is strictly regulated by the state in terms of issuance and circulation, and is an important embodiment of national economic sovereignty. Virtual currencies, under the guise of 'decentralization', attempt to detach from the national financial regulatory framework, and their speculative trading behavior is essentially a challenge to the authority of legal currency. Some virtual currency projects also consume a large amount of energy through 'mining', which goes against the 'dual carbon' goals, and there are also technical security risks, as they may be attacked by hackers leading to losses of user assets. Strictly cracking down on virtual currencies is not only an inevitable requirement to maintain the circulation order of legal currency, but also an important measure to safeguard national financial sovereignty and energy security.
IV. Protecting the Legitimate Rights and Interests of the Public: Uncovering the false facade of 'high return' scams
Speculation in virtual currencies is often accompanied by false advertising, with many platforms attracting ordinary investors with slogans like 'capital preservation and high returns' and 'get rich overnight', which actually hide Ponzi schemes. Because virtual currency trading is not protected by law, once a platform goes bankrupt or runs away, investors cannot recover their losses through legal means. In recent years, many regions in our country have seen virtual currency trading disputes, making it difficult for investors to protect their rights, leading to various social problems. Strictly cracking down on virtual currency trading speculation is to protect the legitimate rights and interests of the public and guide investors to establish correct investment concepts, staying away from high-risk speculative activities.
It should be made clear that our country does not deny blockchain technology, but firmly fights against illegal activities and speculative trading using virtual currencies. As a new type of information technology, blockchain technology has broad application prospects in finance, logistics, government affairs, and other fields. Our country has always supported the legal and compliant development of blockchain technology.
Hereby remind that virtual currency trading and speculative activities disrupt the economic and financial order, breed illegal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering, severely endangering the property safety of the people. We urge the public to recognize the essence and harm of virtual currencies, enhance risk prevention awareness, stay away from virtual currency trading speculation, and choose legal and compliant investment channels and products. If any clues related to illegal activities are found, please report them to the relevant authorities in a timely manner.#虚拟币