The Chinese central bank has provided information on fraudulent blockchain schemes and how to avoid falling prey to them. He also asked retail investors to report criminal clues to the relevant departments.
Do not believe in "Blockchain"
On Friday 24 August, the People's Bank of China, together with four other regulators, warned against the collection of illegal funds, pyramid schemes and prevailing frauds under the banner of " blockchain "and" financial innovation "in the virtual resource space.
Regulatory authorities have outlined three different characteristics of such fraudulent fundraising programs:
- Numerous illegal blockchain schemes operate abroad through online communication channels as chat tools. These schemes also take advantage of online payment methods for fundraising and are difficult to track with their servers located abroad.
- Some blockchain schemes also use deceptive techniques to attract and attract retail investors. They promote their projects through false propaganda, sweets that transpire and touch celebrities. Such schemes often promise high returns at low risk and in a short period of time.
- Blockchain schemes that play the role of "financial innovation" showing "static gain" (economic appreciation) and "dynamic income" (profit development) as a means of attracting retail investors
A rough translation of the 39. warning from regulatory bodies said:
The general public should be rational about the blockchain, […] establish a proper monetary concept and investment philosophy, effectively increase risk awareness and actively report illegal criminal clues found to the relevant departments.
Alipay to Counter OTC Crypto Trading
Popular Chinese app for payments Alipay has extended support for Chinese regulators to track and monitor its user accounts by doing cryptographic over-the-counter (OTC) trading using the Alipay mobile app. Alipay has more than 400 million registered users on its platform and is managed by the subsidiary company of Alibaba Ant Financial.
A local publication quoted Ant Financial as saying:
All together, Alipay will retire resolutely for traders involved in virtual currency transactions; for personal accounts suspected of transactions in virtual currency, depending on the circumstances, take resolute measures to limit the collection of accounts or even permanently restrict collections.
Last week, a series of regulatory announcements came from China to further drive its drive to the annulment of all crypto-related activities in the country. Initially, a government order was issued to close all encrypted communication channels and commercial activities that take place in the country. Apparently this has not been enough since China has also banned 124 websites providing offshore crypto trading services to the Chinese.
Let us know your opinion about China's latest crackdown in the comments below.
Images courtesy of Shutterstock, Bitcoinist archives.