Wen Xinxiang of the Central Bank: The specific path of illegal fund transfer to illegal currency is exposed

Recently, Wen Xinxiang, Director of the Payment and Settlement Department of the People’s Bank of China, stated at the “Tenth China Payment and Settlement Forum” that the payment industry is facing challenges brought about by virtual currencies. Nowadays, the anonymity of virtual currency makes it easier to become a tool for money laundering in illegal and criminal transactions, and the transfer of illegal funds is transformed into illegal monetization.

Wen Xinxiang of the Central Bank: The specific path of illegal fund transfer to illegal currency is exposed

In recent years , the rapid development of virtual currencies represented by Bitcoin has attracted wide attention from regulatory agencies in various countries. my country’s central bank has been continuously increasing its efforts to combat virtual currency speculation and trading. With the upgrading of supervision, the path of using virtual currency to participate in illegal activities has gradually surfaced.

“The use of virtual currency to transfer illegal funds across borders is a typical scenario.” Wen Xinxiang said that in the first half of this year, Henan detected a case of using virtual currency to transfer gambling funds across borders, involving a total of 5.1 billion yuan. Maintaining such a huge amount of capital chain requires a deep trust mechanism. For this reason, my country has specially carried out on-site investigations.

It is understood that in this case, criminals used virtual currency as a medium to transfer huge amounts of gambling funds abroad. Wen Xinxiang pointed out that the use of virtual currency to transfer funds across borders has the characteristics of “money separation” and “money before money”. Through multiple participants and multiple capital flows, criminals have designed a rather complicated capital link.

Among them, there are gangs that specialize in the role of central counterparty (CCP), connecting gambling platforms and currency circles; there are criminal gangs and currency circles that provide a mechanism for dealing with RMB and virtual currency, and form a two-tier structure of large-retail accounts internally .

Wen Xinxiang said that the currency countermeasures mechanism, transaction trust mechanism, and the dual-layer structure of the currency circle of virtual currency are very typical in this case, and it is worthy of in-depth study.

From the perspective of infrastructure, the blockchain is equivalent to a virtual currency payment system and a virtual currency transaction database. The virtual currency exchange is equivalent to a central counterparty and partly assumes the functions of a market maker.

In addition, Wen Xinxiang said that the challenge of virtual currency to the payment system is also reflected in the separation of the closed operation of the payment system, transfer between internal accounts, separation from commercial banks, payment institutions, and account systems, and only when they are exchanged for legal currency; Divert the payment business of banks and payment institutions, weakening the status of clearing organizations.

In fact, the world’s major economies have different attitudes towards virtual currency regulation.

The United States and the European Union focus on appropriate regulation. The United States clearly requires that asset-based and securities-based virtual currencies must be registered and follow the separate supervision model; the European Union released the “Encrypted Asset Market Supervision and EU Digital Financial Strategy” in September last year, trying to unify the virtual currency regulatory framework. Russia, Finland, Sweden, Thailand, etc. prohibit Bitcoin as a payment tool.

“my country is the country that paid attention to the risks of virtual currency earlier and took effective measures.” Wen Xinxiang said that the People’s Bank of China, together with multiple departments, issued documents in 2013 and 2017, clarifying that virtual currency is a virtual commodity, and all financial institutions shall not carry out virtual currency related For business, no organization or individual is allowed to illegally engage in token issuance financing activities, and the hype in virtual currency transactions has been curbed, effectively blocking risk transmission.

Statistics show that since the beginning of this year, the national public security organs have focused their efforts on cracking down on crimes in the dark and gray industries. They have eliminated 608 gangs such as technology development platforms, network drainage promotion, and virtual currency money laundering, and resolutely cut off the technology chain, network chain, and capital chain.


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