Some insiders predict that players involved in currency speculation may experience being banned for the first time in their lives in the past year or two.
Wen|He Wen
Source | Tencent Finance (ID: )
"After four transactions, the bank card was frozen three times. The last time I selected Alipay, the system determined that the transaction was abnormal and Alipay was frozen again."
If you buy something, you dare not sell it. If you make money, it will be difficult to turn it into real wealth. When the price of Bitcoin hit an all-time high, a similar experience was like a dark cloud hanging over the head of every currency speculator.
Since its birth, although the price has often fluctuated greatly, Bitcoin has become a well-known alternative asset that is recognized and traded by more and more people, and its price continues to rise. On the other hand, the semi-anonymous nature of Bitcoin has become a breeding ground for some criminals to hide their identities, transfer funds, and evade foreign exchange controls. Especially since 2017, many countries, including China, have cut off the ability to use legal currency to purchase digital assets such as Bitcoin. USDT, USDC and other stablecoins anchored to the US dollar at a 1:1 ratio have become basic tools in the currency circle. The above measures provide more convenient and risk-free channels.
Since 2020, as the Ministry of Public Security, the Central Bank and other departments have joined forces to crack down on cross-border gambling capital chains, the use of virtual assets such as Bitcoin and stable coins for money laundering and fund transfer has attracted close attention from regulatory agencies. Once the transmission chain of certain illegal funds is involved, such as the sale of virtual currency at suspected OTC merchants, or it is determined to be an abnormal transaction by the bank, the bank card will be frozen for three days to two years. No need to wait. What's more, they will be ordered by the public security department to cooperate with the investigation and explain the ins and outs of the funds.
During the wave of card freezes, although currency prices continued to rise at the end of the year, the industry fell into turmoil and OTC merchants were in danger. A senior player complained to Tencent News "Perspective" that he began boldly buying Bitcoin at low prices in March and then bet on some DeFi concept assets. This year he made more than 10 million, but his friends' experiences of generally having their cards frozen made him afraid to try to cash out easily, so he had to convert it into stable currency and keep it on the exchange.
“In the past few years, people in the currency circle were not so mixed, so KYC was easier to do. But in the past two years, it has been mixed, and some funds are involved in fraud, gambling and even drugs, trying to use virtual currencies to launder money through various disguises. 1 If you are not careful, you will be deceived." An OTC merchant who specializes in over-the-counter trading of virtual assets described to Tencent News "Perspective" that although this part of the funds accounts for a small proportion, once it is involved, the entire upstream and downstream of the fund transmission will be affected. affected. The chain will be affected. Everything will be implicated, leading to cards being frozen or even worse consequences.
Tencent News' "Perspective" learned from people close to regulators that in response to the above risks, the central bank and the foreign exchange bureau have formulated comprehensive regulatory measures, and also have specialized departments directly responsible. "For example, on the day the stablecoin Libra released its white paper, we asked them to explain the risks." With the trend of increasing anti-money laundering supervision and cracking down on cross-border gambling capital flows, the crackdown on gray behaviors in the currency circle will only be more severe in the future. More severe.
It also means the freezing wave may just be the beginning. "Compliance is the only way out for the future." The co-founder of a leading exchange told Tencent News "Perspective" that exchanges need to do a good job at the source and conduct more stringent review of OTC merchant access qualifications.
1.
/ Stable currencies become an excellent tool for money laundering /
Since its birth in 2009, Bitcoin has rapidly become popular around the world and attracted a lot of attention in recent years due to its characteristics such as limited quantity, decentralization, and semi-anonymity.
However, these characteristics also cause Bitcoin to be used by a small number of criminals in various gray areas. Using Bitcoin to bypass central bank foreign exchange controls and transfer capital out of the country has also become one of its uses.
An extreme case is that during the abnormal fluctuations in the A-share stock market in 2015, a trading company that made more than 2 billion yuan in profits through high-frequency trading sought to transfer huge amounts of funds through Bitcoin.
Tencent News "Perspective" learned that Ishidun found the Bitcoin China trading platform at that time, but relevant sources in Bitcoin China revealed that Ishidun did not pass the corresponding real-name verification, and the transaction amount was huge. This behavior caused the platform to issue an alert, thereby denying Ishton’s transaction request.
However, shortcomings such as high price fluctuations and slow transaction speed of Bitcoin cannot provide a sufficient safety buffer for money laundering. With the development of the virtual asset market, stablecoins that connect legal currencies and virtual assets have become the base currency of the currency circle because they provide value-preserving properties in the volatile virtual asset market. They are also favored by criminals as higher-level currencies. Efficient and safe money laundering tool.
Among them, USDT (Chinese name "") is the stablecoin with the highest market share, and its current total market value has exceeded US$19 billion. The stablecoin was launched by the company. 1 USDT is equivalent to 1 US dollar. Users can use USDT to exchange for US dollars at a 1:1 ratio. At the same time, the company claims to adhere to a 1:1 reserve guarantee, that is, for every USDT token issued, its bank account will have a USD 1 funding guarantee.
Domestic regulators have long been wary of the risks posed by stablecoins. Mu Changchun, director of the Central Bank's Digital Currency Research Institute, has stated many times that global stablecoins pose many risks to public policy and supervision, such as legal certainty, governance, anti-money laundering, anti-terrorism financing, and anti-weapons. Mass destruction regulation and payment system security. , market stability, personal privacy and information protection, consumer and investor protection, tax compliance and other challenges, and may lead to the complete opening of underground economic channels and become a tool for illegal transactions.
The report of the Financial Action Task Force (FATF), an authoritative international anti-money laundering organization, also pointed out that stable coins will lead to changes in the virtual asset ecosystem and bring greater risks of money laundering and terrorist financing.
2.
/"The cats and dogs are coming in"/
The money laundering risk brought by virtual assets, especially stablecoins, is the fundamental reason why the entire currency circle has fallen into a wave of freezing cards.
A founder of a virtual asset wallet told Tencent News "Perspective", "The biggest problem in the past two years is that cats and dogs have entered the currency circle, and we cannot have anything to do with these people." Another merchant who has been engaged in OTC for many years complained Dao said that when he first started working in this industry, the most important thing when auditing customers was to prevent telecommunications fraud. However, due to the rise of overseas gambling, pig killing and other phenomena, behind these "cats and dogs" are money related to gambling and even drugs. They hope to obtain funds through OTC transactions. Cross-border transfers or money laundering purposes.
"If you are not careful, there will be a 37-day package waiting for you, and you may even go to jail." The merchant described that a colleague was regarded as a gambling fund intermediary due to incomplete KYC implementation, and cooperated with the public security department's investigation. The 37-day certificate was released without his knowledge, and the currency speculator’s bank card for items purchased and sold from him was also frozen.
At a meeting held in September, Liao Jinrong, director of the International Cooperation Bureau of the Ministry of Public Security, introduced the fight against cross-border gambling crimes. He revealed that according to preliminary statistics, more than one trillion yuan of gambling-related funds flow out of the country every year. Against the backdrop of increasing downward pressure on the economy, risks to economic and financial security continue to intensify. Judging from the criminal pattern, some gambling gangs use virtual currencies to collect and transfer gambling funds, and even engage in online gambling in some areas of Myanmar on the grounds of investment. This new type of channel cannot be frozen and difficult to track anonymously, which brings huge challenges to the crackdown.
The central bank disclosed in October that the Huizhou Central Branch of the People's Bank of China assisted the local police in cracking down on a cross-border online gambling case using virtual currency (USDT). 77 criminal suspects were arrested, 3 gambling websites were banned, and the amount involved was nearly 120 million yuan. This case not only involves circulation within bank accounts, but also virtual currencies. Through multiple money launderings, the whereabouts of the funds are extremely hidden.
“We are now trying to do pure transactions. Simply put, every money and currency we handle has to be reviewed individually. But that’s just an ideal. If every transaction had to be reviewed, 99% of users would essentially have It’s blocked.” The founder of the aforementioned virtual asset wallet said that under stricter supervision, it has become increasingly difficult for OTC merchants to do business.
To avoid having their cards blocked, currency speculators draw on a lot of their own experience. For example, don't use your payroll or regular cards for transactions. Once your bank card is frozen, your mortgage and car loans will be cut off, and there will also be problems with your credit report. Also, don’t use bank cards with large amounts. Bank card risk control is more stringent.
A similar experience is that capital flows need to be moved overnight. A more advanced approach is to buy and sell through different bank cards. The funds obtained from selling coins are immediately purchased into financial products, and then the cash is withdrawn.
3.
/The blow will only become more severe/
But no matter how hard merchants and players try to avoid it, due to the gray identity of virtual currency and its inextricable connection with illegal funds, the wave of frozen cards may be just the beginning.
Regulators close to the central bank told Tencent News' "Perspective" that the current regulatory approach is still to "handle everything in accordance with the notices of the seven ministries and commissions." In 2017, seven ministries and commissions including the central bank announced a strict ban on mutual exchange of “virtual currencies.” It is not permitted to buy or sell tokens or "virtual currencies" or act as a central counterparty. Providing pricing or pricing for tokens or "virtual currencies" is not permitted. Information intermediary and other services.
The crackdown on cross-border gambling capital chains is also facing high pressure. Fan Yifei, deputy governor of the Central Bank, recently pointed out that cutting off the cross-border gambling capital chain is an important task to resolutely win the battle to prevent and resolve major financial risks. It is necessary to be highly vigilant and accurately grasp the difficulties and challenges faced by financial supervision in combating cross-border gambling, continue to strengthen investigation and research, find out the modus operandi of cross-border gambling capital flows, and accurately grasp the actual situation of cross-border gambling capital flows. Adjust prevention and control measures promptly and effectively. Prevention and control strategies and tactics are highly targeted and effective in prevention.
Fan Yifei emphasized the need to strengthen overall coordination, share information, and fully mobilize the power of grassroots branches. At the same time, we will strengthen the main responsibility and continue to strictly hold accountable the main entities of licensed payment services in accordance with the principles of "whoever opens the account (card) is responsible" and "whoever opens the account (card) is responsible". " and "whose cooperative customers are responsible". In addition, risk prevention and control work such as customer identification, large and suspicious transaction reporting, and account withdrawal identity verification have been strengthened in a targeted manner.
The relevant person in charge of the State Administration of Foreign Exchange also stated that the current situation facing the crackdown on cross-border gambling is still very serious and complex. They will maintain a high-pressure crackdown on illegal transfers of cross-border gambling funds, cooperate with the public security organs, continue to severely crack down on underground banks, and resolutely ban them. Cut off illegal exchange and circulation channels for gambling-related funds, and investigate and deal with banks and payment institutions that provide illegal payment and settlement services for cross-border gambling-related funds in accordance with the law.
In a high-pressure situation, the shadow hanging over currency speculators is difficult to dissipate. Some insiders predict that players involved in currency speculation may experience being banned for the first time in their lives in the past year or two.
标签： #Bitcoin #Digital Currency #Cross-Border Payments #Virtual Currency
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