Financial Times: Recognize the risks and be cautious when joining the “cryptocurrency circle

For ordinary people, joining the “cryptocurrency circle” and speculating on virtual currencies that have no real solid foundation is a huge risk, and there is a high risk of losing all your money.

Financial Times: Recognize the risks and be cautious when joining the "cryptocurrency circle

Since the birth of Bitcoin, the “cryptocurrency world” has continued to grow in popularity. Recently, with “dog coin”, “Shiba Inu coin” and other celebrity-supported virtual currencies becoming popular all over the world, the sound of “speculation” is all over the streets and lanes, and in many people’s opinion, it is not difficult to gain great wealth by “speculation”. It seems to many people that it is not difficult to obtain great wealth by “speculating in coins”. However, is this really the case? Is “coin speculation” really the best way to get rich? The answer is obviously no.

Recently, the Internet Finance Association of China, the Bank of China (3.270, 0.00, 0.00%) Association, and the China Payment Clearing Association jointly issued a notice to prevent the risk of speculation in virtual currency trading, clearly stating that member institutions should not carry out virtual currency trading exchange and other financial services; resolutely resist illegal financial activities related to virtual currency, and do not provide accounts and payments for virtual currency trading The announcement made it clear that member institutions shall not carry out virtual currency exchange and other financial business; resolutely resist illegal financial activities related to virtual currency, and shall not provide account and payment clearing, promotion and display services for virtual currency trading.

At the same time, the announcement suggests to the public the risk of participating in virtual currency investment speculation, and clarifies the basic characteristics that virtual currencies such as Bitcoin are not issued by monetary authorities, do not have monetary properties such as legal compensation and compulsory, are not real money, and cannot and should not be used as money in circulation in the market.

From the above authoritative information, it can be seen that virtual currency related business activities are illegal in China. For ordinary people, joining the “cryptocurrency circle” and speculating on virtual currencies that do not have a solid foundation is a huge risk, and it is very likely that they will lose their money.

Therefore, even though it is difficult for people to remain completely rational in front of huge interests, we would like to remind investors that there are huge risks in joining the “cryptocurrency circle” and they must be cautious.

In China, virtual currency investment is not protected by law, this is very clear.

Any trading platform shall not engage in the exchange of legal tender, tokens or virtual currencies; shall not buy, sell or act as a central counterparty to buy and sell tokens or virtual currencies; shall not provide pricing, information intermediary and other services for tokens or virtual currencies. Financial institutions and non-bank payment institutions shall not directly or indirectly provide products or services such as account opening, registration, trading, clearing and settlement for token issuance and financing and virtual currencies; they shall not underwrite insurance business related to tokens and virtual currencies or include tokens and virtual currencies in the scope of insurance liabilities.

These clear rules and regulations clearly tell us that speculation on virtual currencies is not protected by law, and if you suffer losses, it is difficult to get legal support for your claims.

In addition to the laws and regulations, the endless examples of scams and “leek-cutting” show people the risks and unreliability of speculating in virtual currencies.

The “cryptocurrency circle” is full of chaos and schemes. According to the police inventory, the common ways to speculate on virtual currencies include fake trading platforms, money plate promotion, Ponzi schemes, proxy investment scams, etc. The packaging is different, but essentially they all take advantage of investors’ mindset of getting rich overnight and the psychology of newcomers eager to invest without a way to play information gap and cheat investors.

The most common Ponzi scheme, for example, is characterized by the promise of high returns in the short term, taking the money of later investors as a return to early investors and playing the game of “pass the buck”, with a predictable end.

According to a media investigation, digital asset trading platforms are full of chaos, some platforms specialize in harvesting the elderly who lack information and are weak in vigilance, and use pyramid schemes to trap people into the game; some platforms create the persona of “single teacher” and “investment expert” to attract Some platforms create the persona of “single teacher” “investment expert” to attract investors to “take the bait”, first to impose a small profit, and finally run away. News of investors of different regions and ages being cheated happens from time to time, from a few thousand dollars to millions of dollars.

The country’s clear laws and regulations, as well as various real cases, are always reminding ordinary investors that the “coin circle” is deep and risky, so they must be cautious when entering the circle.

Since 2013, China’s financial management department has issued several announcements to alert the risk of speculation in virtual currencies and strengthen the supervision of the “cryptocurrency circle”. Stricter regulation is bound to better protect the safety of investors’ funds and prevent financial risks.

In the face of people’s increasing enthusiasm for investment and the lure of interest, we still have a long way to go to strengthen investor education, establish a pragmatic and non-flashy investment culture, and abandon the illusion of overnight riches.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/financial-times-recognize-the-risks-and-be-cautious-when-joining-the-cryptocurrency-circle/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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