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Why is another virtual currency trading platform thundering illegal financial activities despite repeated prohibitions

Time : 06/01/2022 Author : 03sukl Click : + -
        On July 25, Hoo of the currency circle Exchange announced on its official website and Weibo that it would stop all trading services, cancel all business status and transfer user assets to its wallet account from August 1. It is reported that the virtual currency trading platform Hufu was established in 2017, and its business covers currency trading, contract trading, legal currency trading, financial lending, Hufu rights and interests, Hufu mining, Hufu trusteeship, etc. At the beginning of 2021, Wang Ruixi, the founder of Hufu, said in an interview that at that time, Hufu had nearly 1.2 million registered users and more than 50000 daily active users. From the perspective of user distribution, it was mainly overseas users, accounting for 60% or 70% of the total users.
        Hufu said in the announcement, "recently, due to the rapid changes in the market, many external investment institutions, public chains, lending projects and platforms have problems, resulting in a gap in our cash flow.". The thunder of tiger talisman seems to have "a clue". As early as mid and late June, many people in the currency circle claimed on Weibo that Hufu was about to run away, and even said that there had been rumors at the beginning of this year. On June 19, the Hufu trading platform announced that the recent market fluctuations, coupled with the liquidation and liquidity depletion of some large institutions in the industry, have exacerbated users' anxiety. The withdrawal audit time may be delayed by 24-72 hours, and will gradually return to the normal level after 72 hours.
        On July 2, Hufu posted a twitter picture on his Weibo, saying it was "just sent by the boss". Wang Ruixi, the founder of Hufu, wrote, "we are now committed to solving the liquidity problem. Please give us more time.". On July 15, Wang Ruixi, the founder of Hufu, tweeted that Fang Wenbin (net name: top), the former head of coin security, used his position in Hoo to delete the company's system without permission, which led to the company's owners unable to access the system, resulting in the temporary failure of the main domain name, and apologized for the inconvenience. From restricting the withdrawal of money to causing panic among users, to insiders deleting the company's system, Hufu has finally become one of the currency circle trading institutions that have exploded recently.
        Previously, the Luna coin project known as "coin circle Moutai" collapsed in May. Subsequently, coin circle hedge fund Sanjian capital and Celsius, one of the world's largest crypto lending platforms, filed for bankruptcy one after another. On July 17, AEX (anyin) exchange, the currency circle trading platform, suspended the platform related services and cooperated with the police investigation. "Since the Luna event in May 2022, the entire digital asset market has plummeted, and many investment institutions and platforms have fallen into a liquidity crisis." Yu Jianing, CO chairman of the blockchain special committee of the China Communications Industry Association, told pengpai news () that if the market continues to fluctuate sharply, there may even be more cases of thunderstorms on trading platforms in the future.
        In fact, last year, China identified the provision of services by overseas virtual currency exchanges to Chinese residents through the Internet as illegal financial activities. Surging news reporters noted that hoo, a Hufu website, is registered in the Cayman Islands. As early as May 21, 2021, the financial stability and Development Commission of the State Council clearly proposed to crack down on bitcoin mining and trading, and resolutely prevent the transmission of individual risks to the social sector. As a result, a new round of rectification activities against mining and trading of virtual currencies has been carried out rapidly. On September 24, 2021, the people's Bank of China and other 10 departments issued the notice on further preventing and disposing of the risks of speculation in virtual currency trading (hereinafter referred to as the notice), which made it clear that the services provided by overseas virtual currency exchanges to domestic residents through the Internet were also classified as illegal financial activities, and there were legal risks in participating in virtual currency investment and trading activities.
        These include a comprehensive ban on services related to virtual currency settlement and the provision of trader information, and criminal responsibility will be investigated for engaging in illegal financial activities. The provision of services by overseas virtual currency exchanges to Chinese residents through the Internet is also banned, and the relevant departments will strengthen the monitoring of all related behaviors. After the release of the notice, the three cryptocurrency trading platforms of Huo coin, Qian an and okex successively announced their withdrawal from the Chinese Mainland market, and most currency circle exchanges stopped using them by Chinese users. However, many companies still set up trading platforms overseas and provide services for Chinese users. Yu Jianing said, "in essence, this constitutes illegal financial activities.
        ”。 According to the notice, after finding clues about illegal financial activities related to virtual currency, the local financial regulatory authorities, together with the branches of the financial management department of the State Council and other relevant departments, will investigate, identify and properly deal with them in a timely manner according to law, and seriously investigate the legal responsibilities of relevant legal persons, unincorporated organizations and natural persons. If crimes are involved, they will be transferred to judicial organs for investigation and punishment according to law. "However, due to the anonymity of virtual currency, as well as the difficulties in the investigation and supervision of overseas platforms, it is difficult to crack down on virtual currency trading platforms, and it is very easy to resurge. Therefore, we can see that the phenomenon of domestic virtual currency trading continues despite repeated prohibitions." Yu Jianing said, "I believe that with the construction of a multi-dimensional and multi-level risk prevention and disposal system, this phenomenon can be effectively curbed.
        ”。 In view of the recent thunderstorm of many currency circle institutions, Yu Jianing suggested that relevant users learn more about relevant policies and see the chaos of the industry. The rise of speculation in virtual currency trading disrupts the economic and financial order, breeds illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering, and seriously endangers the property safety of the people. "In fact, some digital assets have unrealistic publicity and speculation, which makes the market valuation deviate from the basic value or are given too high expectations. There are also some assets that do not really use blockchain technology in essence, but obtain valuations that are completely inconsistent with the actual value under the banner of blockchain. The so-called innovation of many projects is divorced from the needs of the real economy and is entirely speculative.
        In addition, many projects are frauds, pyramid schemes, manipulation in the market and other behaviors are common, which essentially disrupted the financial order. ".
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