7 departments including the central bank to prevent electronic fraud and cross-border gambling, emphasize the safety of digital renminbi

Beginning in the second half of this year, with the continuous advancement of the digital renminbi pilot, the pilot scenarios and use environment have also continued to expand. On the other hand, fraud cases regarding digital renminbi have begun to surface.

Digital renminbi fraud emerges endlessly

At the beginning of November, local public security agencies successively released relevant digital RMB fraud information. The cases generally defraud consumers’ trust through methods such as “Pretending to be Public Prosecutors Law”, “Online Loan Impact Credit Investigation”, “Online Shopping Cash Back” and other methods, requiring individuals to provide bank card numbers, passwords, etc. Information, even facial information and mobile phone verification codes are provided to criminals through “screen sharing”. In the end, criminals transferred the funds by opening multiple “digital renminbi” wallets for users. 

Before that, there were not a few cases of fraudulent use of digital RMB in the name of “official”.

Some have forged the signed SMS. By sending consumers a successful digital RMB internal test and signing a short message with a link for registration information, they can obtain consumer personal information, including bank card number, balance, password, identity information, mobile phone number, etc. And remind consumers that a certain amount of balance is required in the card to participate in the experience. After the consumer puts the money into the account, the scammer transfers the balance away.

There are financial management pyramid schemes that run away from fundraising. Taking advantage of the fact that many people do not know enough about digital renminbi, they falsely claim and fake that they are official promoters of digital renminbi. Now they have developed a “digital renminbi” wealth management project to invite lucky investors to participate in a limited time. Exaggerating the income of the “financial management project”, claiming that high returns can be obtained in a short period of time, the risk is very low, and investors are tempted to buy. After the investors buy, they collect a lot of funds and run away.

Some people pretend to be a closed beta app to defraud funds. Taking advantage of the internal beta of the digital renminbi, falsely claiming that the promotion is an official app, can give consumers the first opportunity to experience the digital renminbi. To deceive consumers to participate in the digital RMB experience test requires the payment of the preliminary test funds, and after the test is completed, the fee will be doubled, and then the funds will be defrauded and run away. 

On the other hand, the use of virtual currency transactions to hype is also repeated bans. The prevalence of Bitcoin and other virtual currency trading activities disrupts the economic and financial order, breeds money laundering, illegal fundraising, fraud, pyramid schemes and other illegal and criminal activities, and seriously endangers the people’s property safety.

Supervision frequently calls for standardized governance

Regarding the virtual currency hype, the consistent attitude of the regulation is to explicitly resist it. In September of this year, ten departments including the People’s Bank of China jointly issued the “Notice on Further Preventing and Disposing of the Risks of Hype in Virtual Currency Transactions”, which once again reiterated the trend of normalized crackdown.

It can be said that since the People’s Bank of China issued the “Risk Reminders on Issuing or Promoting Digital Currency in the Name of the People’s Bank of China” in 2017, the People’s Bank of China has reiterated the risks of illegal fund-raising, ICO, and virtual currency transactions almost every year.

As for digital renminbi fraud cases, the Xiong’an New District Management Committee and the People’s Bank of China’s Xiong’an New District Business Management Department issued the “Risk Reminders on Preventing Telecom Fraud Using Digital RMB” in November this year to remind residents to raise awareness of prevention. Protect your own property safety.

This is obviously a symptom and not a root cause. According to the understanding of mobile payment network, in order to combat telecommunication network fraud and cross-border gambling, the People’s Bank of China and the Ministry of Public Security have recently formulated the ” Telecommunications network fraud and cross-border gambling “funding chain” governance work plan” (hereinafter referred to as the “plan”), according to the division of responsibilities, implement the main responsibilities, build a normal working mechanism, fundamentally crack down on the governance of telecommunications network fraud and cross-border gambling.

Among them, the “Plan” not only mentioned the need to severely crack down on the use of virtual currency to transfer funds involving fraud and gambling, but also mentioned the need to strengthen cross-border and border area capital flow management and digital renminbi risk management to prevent digital renminbi from being used to transfer funds. Fraudulent gambling funds.

According to an industry insider disclosed to the mobile payment network, the scope of this digital renminbi fraud case is very wide, and the funds involved are also large, so the regulatory and operating agencies attach great importance to it.

After the latest digital RMB App update, various operating agencies have also intentionally or unintentionally tightened and reduced the overall wallet quota, and adjusted the prevention and control of fraud from the source.

Concluding remarks

This time, the People’s Bank of China has worked with many departments to formulate relevant governance plans for telecommunications network fraud and cross-border gambling. The work measures have been detailed to each functional department, and the corresponding completion time has been stipulated, which can not be said to be ignored. 

Among them, the security of digital renminbi is also a key point in the pilot process, so continuous optimization is required in terms of supervision, operation and business processes.

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