Fraud, money laundering, price manipulation …… How did virtual currencies become the “new darling of crime”?

In the “cryptocurrency world”, it can be a matter of minutes from “ecstasy” to “woe is me”.

Fraud, money laundering, price manipulation ...... How did virtual currencies become the "new darling of crime"?

In the “cryptocurrency circle”, it can be a matter of minutes from “ecstasy” to “mourning”. The price of the cryptocurrency can go up and down, the lies of the ceiling, and the elaborate scams …… These chaotic situations in the “cryptocurrency circle” make it easy for many cryptocurrency holders to fall into the traps laid by criminals.

What is the “magic” of virtual currencies and how did they become the “new darling of crime”?

“The first time I thought I could make a fortune, I didn’t expect to lose more than 100,000 yuan.” The first time she stepped into the “coin circle” in 2019, Ms. Cao, a citizen of Wuxi, Jiangsu, told reporters that although she knew the risks were not small, she looked at the soaring prices and listened to the lobbying of people around her, she still invested in several “virtual coins” on the shell international platform in one breath. The “virtual coin”.

At first, the “coin value” kept rising, some prices even rose three times, Ms. Cao kept investing more. She thought that as long as someone bought, she would not lose money in the middle of the transfer. The result was that after more than six months, the platform was unable to trade withdrawals, and she realized she had been duped.

There are few people who have similar experiences with Ms. Cao. Although some people are disturbed by this method of making money, they still want to take chestnuts from the fire, thinking that they won’t be the last one to “beat the drum”. Many criminals take advantage of this and use virtual currencies and blockchain as fronts for illegal fundraising and fraudulent activities.

At the end of 2020, the People’s Court of Xiangshan District, Huaibei City, Anhui Province, publicly announced the verdict of a mega cross-border telecom fraud case wrapped in virtual currency, in which 79 defendants were sentenced for committing fraud.

This criminal group often “targets” customers with financial strength, and through live streaming, WeChat group exchanges, advocating the appreciation space of virtual currency products. The actual money that the customer put into the real money, the first virtual currency will keep rising, so that people have a small profit, to induce customers to continue to increase investment. When the investment reaches a certain amount, the criminal group will manipulate the virtual currency cliff fall, causing the appearance of customer losses, so as to cheat the victim’s belongings.

As you can see, behind the “magic” of virtual currency is often the drive for high returns and a blindness to high risk.

“I listened to classes every day and learned about the cryptocurrency world carefully, but I lost only $2.50 after an operation as fierce as a tiger.” A “post-90s” investor told reporters that he was keen on new things, alternative investments, and saw a coin soar in early May and invested tens of thousands of yuan. I didn’t expect the coin to plummet a few days later because of a few comments from “coin circle” bigwigs, which made him start to suspect that there are “bankers” behind the virtual currency price control.

In recent years, dog coins, cat coins, pig coins, eel coins and other virtual currencies have emerged, these virtual currencies are not “currency”, and these animals do not have any relationship, seemingly the name on the figure of a “friendly and lovely”.

These “air coins” have no physical support, no application value, and their expansion mode is highly consistent with the money-grubbing scheme: the founder registered a shell company to launch “virtual coins”, a lot of publicity to enhance the heat, to induce people to buy overseas top-ups, a huge number of holders manipulate the price spike after the sell-off, the price plummeted many investors suffered heavy losses ……

In the opinion of experts, virtual currency is called “currency” in name, but in fact it is not a currency at all. It is not issued by the monetary authorities of any country and cannot be used as money in the market, at best it is a specific virtual commodity and should not become the subject of speculation. Many of these “air coins” have ambiguous issuance techniques, uncertain issuance ceilings, and a huge number of holders, making them extremely vulnerable to price manipulation by “bankers”.

China’s regulators have long been aware of the risks associated with virtual currency trading speculation, and have not only repeatedly issued documents requiring financial institutions and payment institutions not to conduct business related to bitcoin, but also called a halt to all types of token issuance and financing, and carried out special rectification. At present, China’s virtual currency trading platform and initial token offering (ICO) trading platform has been basically purged.

However, many platforms have placed their servers outside of China, cheating at home and counting money outside of China, and many trading platforms are engaged in cross-border money laundering to avoid foreign exchange regulation.

There is a limit to the total number of bitcoins, which are scarce and therefore sought after by some people. However, virtual currencies such as Bitcoin, which are anonymous, difficult to trace and borderless, have also become an ideal way for criminals to launder money.

The Supreme People’s Procuratorate and the People’s Bank of China have announced a typical case of virtual currency money laundering. The defendant, Chen Mouzhi, “laundered” stolen money into bitcoins for Chen Moubo to squander abroad after his ex-husband, Chen Moubo, absconded from the country due to a suspected capital raising fraud, amounting to more than 900,000 yuan. In the end, Chen Mouzhi was sentenced to two years in prison and a fine of 200,000 yuan for the crime of money laundering.

The “coin circle” is not a place outside the law. As the relevant laws and regulations are increasingly improved, international collaboration to combat the increasing intensity, the use of bitcoin and other virtual currency money laundering “gray space” is narrower and narrower.

Recently, the price of virtual currency has skyrocketed, and the speculative activities of virtual currency trading have rebounded significantly. In the face of the chaotic “cryptocurrency circle”, the State Council Financial Committee recently sent a clear signal to the market to crack down on bitcoin mining and trading; relevant associations jointly issued a paper, prompting the prevention of virtual currency trading speculation risk.

Experts remind investors to establish the correct investment concept, enhance risk prevention awareness, and be wary of virtual currency fraud, pyramid schemes, money laundering and other illegal acts. Do not believe in smallpox promises, do not blindly follow the speculation, always be alert to the risk of speculation to avoid their own property losses.

Xinhua News Agency reporter Wu Yu, Wang Chen Yang, Cheng Siqi

Posted by:CoinYuppie,Reprinted with attribution to:
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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