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The chaos of the digital asset trading platform at the bottom: "drainage" hidden routines, propaganda like pyramid schemes



The mountain rain is about to come and the wind is full of the building.

The price of digital currency has frequently skyrocketed and plummeted, and the atmosphere of speculation is frenzied. The chaos and even criminal behavior surrounding digital assets have attracted great attention from all parties. A few days ago, Bitcoin transactions were "blocked" by commercial banks again.

A recent investigation by a reporter from China Securities Journal found that digital asset trading platforms have been mixed for a long time, and chaos occurs frequently: some trading platforms regard the elderly as "harvest targets", and the "drainage" routine is suspected of pyramid schemes; "Teacher" cooperation, after investors "take the bait", they use technical means to damage investors; and trading platforms are reduced to cross-border "money laundering" tools to evade foreign exchange supervision and so on. Experts interviewed by reporters from China Securities Journal pointed out that these trading platforms have seriously damaged the rights and interests of investors, and it is imperative to strengthen supervision.

Digital currency is an alternative currency in the form of electronic money. At present, there are two mainstream digital currencies in the market: one is the central bank digital currency launched by central banks of various countries, which assumes the function of legal tender; the other is private cryptocurrency represented by Bitcoin, which is more regarded as The invested digital assets have become the object of speculation on the trading platform.

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"If the daily trading volume of the trading platform reaches 10 billion yuan, each shareholder can get at least 2,800 yuan in dividends every day! The future wealth is limitless!" A few days ago, at a meeting of the digital asset trading platform "SPS Exchange", a reporter from China Securities Journal Feeling the restless atmosphere at the scene, as if the opportunity to get rich overnight is at your fingertips.

At the venue, the speaker passionately encouraged investors to invest in the digital asset HHS coin issued by the trading platform. However, will there really be pies in the sky?

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A reporter from China Securities Journal contacted Xiao Chen repeatedly. Talking about this encounter, Xiao Chen was full of bitterness. In October last year, Xiao Chen's mother invested in the HHS coin issued by the "SPS Exchange" under the guidance of a person who claimed to be the person in charge of Haston Blockchain (Shenzhen) Co., Ltd.

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"My mother borrowed tens of thousands of dollars from me at the time, and I didn't ask her what she was going to do with the money at the beginning. Later, she actually wanted to develop me as an offline, and I realized that something was wrong." Xiao Chen told China Securities According to the reporter, the funds invested by his mother in the early stage can no longer be withdrawn.

Although Xiao Chen repeatedly warned her, her mother still had no doubts about the "SPS Exchange" and was very much looking forward to the skyrocketing value of the currency in her hand. Now that there is serious antagonism in the family, Xiao Chen is quite helpless.

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A reporter from China Securities Journal learned that there are currently at least 600 trading platforms in operation around the world. On these platforms, all kinds of digital assets "I come on stage after you sing."

However, these trading platforms are mixed with good and bad, and many trading platforms run wild in the dark, and the hidden chaos is chilling.

What Chen’s mother encountered was the “drainage” routine, and Haston is the so-called “drainage” company. A member of Hashton told the reporter of China Securities Journal that after investing in HHS currency, he can become a member of the "SPS Exchange". If there are enough downlines, he is expected to become the original shareholder of the trading platform.

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This method of "pulling people's heads" is similar to pyramid schemes, relying on the rise of digital currency to deceive users, and expanding the market through the development of offline methods, which has a strong penetration. A screenshot provided by Xiao Chen to a reporter from China Securities Journal shows that in addition to Shenzhen, Hashton has also expanded its business to Guangzhou, Foshan, Changsha, Wuhan and other places. Only the WeChat group of investors in the county-level city where Xiao Chen works exceeds 400 people.

In addition to "drainage", the routine behind "bringing orders" is also shocking. The so-called "ordering" means that the "teacher with order" guides the buying and selling points of a certain currency, and guides users to trade on the trading platform. Li Ming (pseudonym), a "teacher with orders" who claims to cooperate with "BTA Exchange", introduced that he will provide users with trading strategies for a certain currency, guide users to carry out follow-up transactions on designated trading platforms, and frequently "do short term". Li Ming told reporters that there are as many as 50 "teachers with orders" in his team.

Can following the "teacher with orders" really make a stable profit? The answer is undoubtedly no. Not only that, Yu Jianing, the rotating chairman of the Blockchain Special Committee of the China Communications Industry Association, pointed out that in some cases, the "teacher with orders" will lead customers to black trading platforms for transactions. At the beginning, black trading platforms will let users earn money. Small profits, and later use methods such as refusal to trade, high-level forced liquidation, extreme market conditions that cannot be operated, or even shut down and run away, and inability to withdraw coins to maliciously cause investors to lose money, or even liquidate their positions.

In addition, there are trading platforms suspected of illegal fundraising and reduced to money laundering tools. A typical case of punishing money laundering crimes jointly released by the Supreme People's Procuratorate and the People's Bank of China in March showed that Chen Moubo issued currency by opening a trading platform, delayed or even refused investors to withdraw cash, was suspected of fund-raising fraud and fled abroad. His wife helped him transfer fund-raising fraud funds overseas and was found guilty of money laundering.

The supervision of digital asset trading platforms still faces many difficulties. First of all, it is difficult to supervise the legal entity. Trading platforms originally registered in the Mainland have already “goed overseas”, and there are certain obstacles in supervision. Some victims also reported that they did not know the geographical location of the trading platform and the person responsible, and fell into a situation where they had nowhere to complain.

Second, tracking transactions is also a big challenge. Song Jiaji, director of the Guosheng Securities Blockchain Research Institute, said that the decentralized nature of digital assets makes the trading platform only a place for matching, and it is often difficult to track users once they withdraw money. In addition, the rapid iteration of digital asset technology, especially the emergence of decentralized finance, makes it difficult for supervision to be carried out within the original technical framework.

In addition, there are no mature regulatory rules around the world for reference. Ding Feipeng, Director of the Criminal Department of Beijing Shangguang Law Firm, said that at present, various countries and regions have different regulatory policies, rules, and attitudes towards trading platforms. There is no universal standard, and most of them are in the stage of exploration and experimentation. For example, Singapore, Japan, the United States, Malaysia, Switzerland, the United Kingdom and other countries conduct supervision by issuing licenses, while Hong Kong in my country adopts a regulatory sandbox model, and some countries do not even have supervision.

In fact, a wider consensus is being formed to strengthen the supervision of virtual currency transactions.

On the one hand, improving laws, regulations and regulatory mechanisms is the top priority. Yu Jianing said that the legal status of digital assets and trading platforms should be clarified, regulatory standards and regulatory responsibilities should be determined, and a sound access and exit mechanism should be established. Regulatory authorities should supervise the operational capabilities and risk management and control capabilities of the trading platform, requiring the trading platform to disclose relevant content-zce such as shareholder qualifications, financial capabilities, business scope, financial rules, and security management. to review.

As far as the current stage is concerned, many industry insiders pointed out that the regulatory sandbox is a desirable model. The so-called "regulatory sandbox" means that the regulatory authorities allow trading platforms to conduct business tests in real or simulated market environments under limited business licenses in accordance with moderately simplified access standards and procedures.

In the eyes of industry insiders, this inclusive and prudent model not only severely cracks down on illegal trading platforms, but also gives living space to compliant trading platforms, which will help establish and lead industry standards in the field of digital assets.

On the other hand, strengthen the management of technology application level. "It is necessary to strengthen the anti-money laundering management and asset security management capabilities of the trading platform, monitor the daily transactions of the trading platform through data analysis and other technical means, identify, evaluate, and continuously monitor money laundering risks, and gradually explore the custody of digital assets. , multi-party joint management or insurance mechanism, and strengthen auditing." Ding Feipeng said, "For contract transactions with relatively high risks, you can refer to futures transactions and strictly limit the leverage ratio of trading platforms."

It is worth mentioning that with the rising enthusiasm of the public for investing in digital assets, investor education has a long way to go. Ye Gengqing, a lawyer from Yingke Law Firm, suggested that investors should keep their eyes open, strengthen their understanding of the underlying applications of digital assets, and at the same time strengthen prevention of illegal activities, report relevant clues in a timely manner, and beware of being deceived.


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