Three Associations “Block” Virtual Currencies, Bitcoin Plunges! A new round of consolidation may be coming?

Previously, the central bank and other ministries had made it clear in 2013 and 2017 that virtual currency trading and token issuance and financing platforms were suspected of illegally issuing securities and illegal fundraising.

Three Associations "Block" Virtual Currencies, Bitcoin Plunges! A new round of consolidation may be coming?

The A-share digital currency sector is shaking down. As of writing, Lanke Technology (17.050, -0.82, -4.59%), *ST Jurong (4.560, -0.16, -3.39%) are down more than 4%, and Windsor (9.690, -0.31, -3.10%), XKP (10.110, -0.31, -2.98%) The company’s shares have fallen to varying degrees, including Nantian Information (13.050, -0.32, -2.39%).

In response to the recent rise in speculative activities in virtual currency trading, the Internet Finance Association, the Banking Association and the Payment Clearing Association jointly issued an announcement on the 18th, requiring member institutions not to carry out virtual currency trading exchange and other related financial businesses.

As a result of this news, cryptocurrency prices fell in response, with bitcoin prices dropping from $45,600 to near $42,000.

In early trading today, the A-share digital currency sector shocked down. As of press time, Lanke Technology and *ST Julong fell more than 4%, and many stocks such as WinSpring, XinKaiPu and NanTian Information fell to different degrees.

On May 18, China Internet Finance Association, Bank of China (3.270, -0.01, -0.30%) Industry Association and China Payment Clearing Association jointly issued “Announcement on Preventing the Risk of Speculation in Virtual Currency Trading”.

The announcement said that virtual currency is a specific virtual commodity, not issued by the monetary authorities, does not have the monetary attributes of legal tender and compulsory, is not real money, and should not and cannot be circulated in the market. And, to carry out legal tender and virtual currency exchange and exchange business between virtual currencies, to provide information intermediary and pricing services for virtual currency transactions, token issuance financing and virtual currency derivatives trading and other related trading activities, not only violate the relevant laws and regulations, but also suspected of illegal fund-raising, illegal issuance of securities, illegal sale of tokens and coupons and other criminal activities.

The announcement requires that financial institutions and payment institutions shall not use virtual currency to price services and products, shall not underwrite insurance business related to virtual currency or include virtual currency in the scope of insurance liability, and shall not directly or indirectly provide other services related to currency for customers. If illegal and irregular clues are found, measures such as restricting, suspending or terminating relevant transactions and services shall be taken in a timely manner and reported to the relevant authorities in accordance with the procedures. Strengthen customer publicity and warning education, and take the initiative to do a good job involving virtual currency risk tips.

The announcement also points out that Internet platform enterprise members shall not provide network business premises, commercial display, marketing and publicity, paid diversion and other services for virtual currency-related business activities, and shall promptly report to the relevant departments when relevant clues are found, and provide technical support and assistance for relevant investigations and detective work.

A new round of cryptocurrency consolidation may be coming

Since 2020, virtual currency prices have fluctuated dramatically. Bitcoin prices have risen from a low of $3,800 to a high of $64,000, and the virtual currency market has opened a so-called “bull market”.

Previously, the central bank and other ministries issued the “Notice on Preventing Bitcoin Risks” and “Announcement on Preventing Risks of Token Issuance and Financing” in 2013 and 2017 respectively, making it clear that virtual currency trading and token issuance and financing platforms are suspected of illegal issuance of securities and illegal fund raising.

And a few days ago on April 22, CITIC Bank (5.270, -0.04, -0.75%) took the lead in announcing that in the future, no institution or individual shall use the Bank’s account to top up and withdraw transaction funds, buy and sell Bitcoin and Wright’s related transaction top-up codes, and related transaction funds shall not be transferred through our Bank’s account. Once discovered, it has the right to take measures such as suspending relevant account transactions and canceling relevant accounts.

In addition, since April, a number of countries, including the United States, India, Turkey, South Korea and others, have successively imposed stricter regulations on cryptocurrency trading.

According to the Securities Times, William, chief researcher at the Euromoney Institute, said bitcoin is a high-risk emerging asset with high daily price volatility and frequent spikes and drops. From an empirical perspective, retracements that occur during a bitcoin bull market range from about 33% to 66% of the underlying trend direction advance and last for a week or several weeks at a time.

In addition, the announcement points out that virtual currencies are not supported by real value, prices are highly susceptible to manipulation, and related speculative trading activities are subject to multiple risks such as false asset risk, business failure risk, and investment speculation risk. From China’s existing judicial practice, virtual currency trading contracts are not protected by law, and the consequences and losses caused by investment transactions are borne by the relevant parties themselves.

At the same time, the announcement reminds consumers to enhance risk awareness, establish the correct investment concept, do not participate in currency trading speculation activities, beware of personal property and rights and interests are damaged. To cherish personal bank accounts, do not participate in virtual currency recharge and withdrawal, purchase and sale of relevant transaction recharge codes and transfer of relevant transaction funds and other activities to prevent illegal use and leakage of personal information.

Posted by:CoinYuppie,Reprinted with attribution to:
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