Tightening of regulation “frozen cards” intensified

Only charged no withdrawals, said I flow. In addition to mining links, “frozen cards” are also becoming more frequent.

In recent times, Chinese regulators have issued strong regulatory signals one after another, and bitcoin prices have experienced the most substantial adjustment this year. After the Financial Committee meeting, Inner Mongolia quickly issued local rules to combat virtual currency mining, which can be quite severe, forcing many mining machine manufacturers to “go offshore”. Outside of the mining segment, “frozen cards” are becoming more frequent.

“Excuse me, is this a frozen card?”

Tightening of regulation "frozen cards" intensified

A rights group gathered hundreds of netizens, there are bank cards were frozen, there are exchange accounts were frozen, and some due to May 19 exchange downtime led to the explosion of positions, the recent daily news “lively” extraordinary.

“My paypal is also frozen, so it’s ruined.” The group of friends advice, “contact the bank, the police station is useless, and so on the line. Short of three days, long of six months. The contact may not want you to personally go over to make a statement.”

“XX Exchange I suggest not to play, my account is also frozen, I only charged money did not withdraw, said I flow abnormal. I only charged 150,000 results frozen the next day, frozen police station is Jiangxi Jinggangshan, called to say that there is an abnormal flow of water.” This is not the only group of people who have had their accounts frozen, and this is not the only exchange.

“In XX how so many difficult friends are frozen, can not withdraw coins, can not sell coins?” At the end of May, there were suddenly dozens more people in the rights group, and after initiating solitaire there were quickly 20 groupies who had their accounts frozen filling in their personal information and amounts.

The group of people who had their accounts frozen asked the exchange staff, and the reply was “Your account was frozen at the request of the police.” The freezing paperwork was told that it was necessary to seek customer service, and the estimated queue time for customer service consultation was more than 6 hours. Previously, the police station “frozen card”, account management in the hands of the exchange, the police station to freeze the account is the first time to hear, the group of friends also said unheard of.

Several domestic virtual currency exchanges, in fact, “went overseas” after the regulatory storm on September 4, 2017, moving their servers overseas, but Chinese users can still trade on the exchanges via the Internet.

According to The Block Research data, as of May 27, the supply of U.S. dollar stable coins exceeded $100 billion, with USDT accounting for about 62%, USDC for 20.42%, and BUSD for 8.89%. 2021 early to April 30, USDT on-chain trading volume of $10,100,000. How much transaction volume Chinese users contribute we will not know, but some of the stable coin transactions have become a convenient means of money laundering.

An exchange-related personnel said that the current channel of using virtual currency money laundering is mainly “running score platform”. The “running score platform” hangs on the entrance of the gaming platform or other APP, aggregates third-party payments, cooperative banks and other service provider interfaces, uses rented bank cards and payment accounts to top up gambling money, uses flexible labor platforms to withdraw cash in the territory, and uses underground money and virtual stable coins to withdraw cash across the border. Stable coins have become the “new favorite” of these platforms.

On May 18, 2021, China Internet Finance Association, China Banking Association, and China Payment Clearing Association jointly issued the “Notice on Preventing the Risk of Speculation in Virtual Currency Trading”, which clearly cracked down and restricted virtual currency trading and exchange business, requiring financial institutions, payment institutions and other member units not to carry out business related to virtual currency.

On May 21, the Financial Committee of the State Council held a meeting with special emphasis on cracking down on bitcoin mining and trading practices and resolutely preventing the transmission of individual risks to the social sector.

Illegal crimes using virtual currencies are becoming more frequent and public security actions are being stepped up. on May 12, 2021, Hangzhou West Lake District People’s Court heard the case of Zhao Dong, a well-known over-the-counter trading merchant, who was suspected of illegal business operations and helping criminal activities in information networks, which received attention from the industry. According to reports, the prosecution in the trial mainly based on its fulfillment of only the name and ID number of the simple KYC audit, and the funds mainly from the offshore gaming platform “running score” of the fourth-party payment platform transactions, litigation instructions, and recommended a sentence of up to three years in prison, and a fine.

One lawyer said, “Unknowing traders may have their cards frozen for being involved in money laundering, receiving black money but not knowing it themselves.” Due to the anonymity of virtual currencies, over-the-counter transactions have become a major area of black and gray assets such as online gambling, and have previously become a key area of anti-money laundering monitoring by regulators, with the recent phenomenon of “frozen cards” becoming even more so.

An investor reported that he was unable to pay for transactions using WeChat Pay and was restricted from trading, to which WeChat Pay replied, “The current transaction is suspected of fraudulent risk.”

On May 19, some exchanges closed their OTC boards after three associations issued announcements. Informed sources said “the exchange did not receive a notice from the regulator, and closed the transaction is a proactive risk aversion.”

How to “prevent freezing” has been a problem in the cryptocurrency industry. The barrier to entry for OTC merchants is not high, and the exchange-based profitability of the difference between buying and selling USDT has made this part of the industry a recognized group of people who are “making a fortune”.

They have a lot of experience in avoiding frozen cards. When trading over-the-counter, merchants will specifically prohibit the use of words like digital currency, bitcoin, or USDT, which can be detected by banks and lead to card freezes. In addition, most merchants will only accept funds that have been deposited on the bank card for more than 3 days, and will look at the last 3-5 days of bank flow for video verification.

There are also many large transactions of merchants directly choose offline transactions, even with credit card collections, “direct set of empty credit cards, the collection will automatically return, was frozen is fine, anyway, do not owe money.”

Although there are many programs to deal with the anti-freeze card, but no one can guarantee foolproof. Many people who want to recharge and withdraw their money keep asking in the group, “How many frozen cards are there these days? Which one is not easy to be frozen?” The company’s main goal is to provide a safe and secure environment for the clients.

This time, China’s regulatory stance is at an unprecedentedly high level, but the existing regulatory tools are inevitably overwhelming in the face of the new decentralized nature of virtual currencies. Shutting down mining farms may later lead to more advanced chips that can be mined using any device. It is also difficult to completely ban the way individuals transfer money to individuals by freezing their cards.

Virtual currency regulation is a global challenge, and a unified regulatory framework for virtual currencies has yet to emerge in the U.S. Fragmented proposals have emerged. For example, on May 20, the U.S. Treasury Department said in a tax report that cryptocurrency transfers over $10,000 need to be reported to the IRS; on May 26, Gary Gensler said during his participation in a congressional hearing that cryptocurrency regulation, which needs to allow investors on cryptocurrency exchanges to enjoy the same protection as on the New York Stock Exchange or Nasdaq platforms to do so.

There are always many problems with new things, and the growth of Bitcoin has been accompanied by regulatory games. Until the industry’s rules are perfected, I’m afraid the “freeze card” fiasco will continue…

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/tightening-of-regulation-frozen-cards-intensified/
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