This article comes from: Tencent News "Periphery", author: He Wen, original title: "The shadow of frozen cards shrouds the currency circle: I made more than 10 million in currency speculation, but I dare not realize it", the title picture comes from: Visual China
"After four transactions, the bank card was frozen three times. The last time I chose Alipay, the system determined that the transaction was abnormal, and Alipay was frozen again."
Buying but not daring to sell, making profits but finding it difficult to turn them into real wealth. When the price of Bitcoin hits record highs, similar experiences are like a dark cloud, hanging over every currency speculator.
Since its birth, although the price has often fluctuated greatly, Bitcoin has become a well-known alternative asset that is known and traded by more and more people, and its price has been rising. On the other side of the coin, 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 way to purchase digital assets such as Bitcoin with legal currency. A variety of stable coins anchored to the U.S. dollar at a 1:1 ratio, such as USDT and USDC, have become basic tools in the currency circle. The above actions provide a more convenient and risk-free channel.
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, money laundering and fund transfers using virtual assets such as Bitcoin and stablecoins have attracted closer attention from regulators. Once involved in the transmission chain of certain illegal funds, such as selling virtual currency at a suspected OTC merchant, or being judged as an abnormal transaction by the bank, the bank card will be frozen for a period of three days to two years. No 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.
Amid the wave of frozen cards, although currency prices continued to rise at the end of the year, the industry was in turmoil, and OTC merchants were in danger. A senior player complained to Tencent News "Perspective" that he started boldly buying Bitcoin at the low price in March, and then bet on some DeFi concept assets. This year he made more than 10 million, but his friends were generally The experience of freezing his card made him afraid to try to cash out easily, so he had to exchange it for 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. However, in the past two years, it has been a mixed bag. There are some funds involved in fraud, gambling and even drugs, trying to use virtual currencies to launder them through various disguises. If you are not careful, You will get tricked." 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 very small proportion, once it is involved, the entire upstream and downstream of the fund transmission chain will be affected. All will be implicated, leading to frozen cards or even more serious consequences.
Tencent News "Perspective" learned from people close to regulators that the central bank and the foreign exchange bureau have already established comprehensive regulatory measures for the aforementioned risks, and there are also dedicated departments directly responsible for it. "For example, on the day the stablecoin Libra released the white paper, we asked them to The risks are explained.” Under the trend of increasing supervision on anti-money laundering and combating cross-border gambling capital flows, the crackdown on gray behaviors in the currency circle will only be more severe in the future.
This also means that the freeze 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 merchants' access qualifications.
"The cats and dogs have all come in."
The money laundering risk caused by virtual assets, especially stablecoins, is the fundamental reason why the entire currency circle has fallen into a wave of frozen cards.
A virtual asset wallet founder 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 get involved with these people." Another merchant who has been engaged in OTC for many years complained that he initially did this When I was in the industry, the most important thing to review customers was to prevent telecom fraud. However, due to the rise of overseas gambling and pig-killing, these "cats and dogs" are behind money related to gambling or even drugs. They want to achieve funds through over-the-counter transactions. Cross-border transfer or money laundering purposes.
"If you are not careful, there will be a 37-day package waiting for you, and you may even be imprisoned directly." The merchant described that a colleague was regarded as a gambling fund intermediary because he did not perform KYC thoroughly, and cooperated with the public security department to investigate the 37-day certificate He was released without knowing it, and the bank cards of currency speculators who bought and sold from him were 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. Under the current background of increasing downward pressure on the economy, economic and financial security risks 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 is difficult to trace anonymously, which brings great 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 the virtual currency Tether (USDT). 77 criminal suspects were arrested, 3 gambling websites were taken down, and the amount involved was nearly 120 million yuan. This case not only involved circulation within bank accounts, but also involved virtual currency. Through multiple launderings, the direction of the funds was extremely hidden.
"We are now trying to conduct pure transactions. Simply put, every money and currency we handle must be reviewed individually. But this is just an ideal. If every transaction must be reviewed, 99% of users have basically been It’s blocked.” The founder of the aforementioned virtual asset wallet said that under the tightening supervision, it is becoming increasingly difficult for OTC merchants to do business.
In order to avoid bank cards being frozen, currency speculators have learned a lot from their own experience. For example, do not use salary cards or credit cards for transactions. Once your bank card is frozen, your home loan and car loan will be cut off, and there will be problems with your credit report. Also, do not use large banks. card because risk control is stricter.
A similar experience is that funds flow needs to be transferred overnight. A more advanced approach is to buy and sell through different bank cards, and the funds obtained from selling coins are immediately purchased into financial products, and then withdraw cash.
The crackdown will only be more severe
But no matter how merchants and players try to avoid it, due to the gray identity of virtual currency and its difficult-to-sever 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 thinking 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 that it is strictly prohibited to exchange "virtual currencies" with each other. It is not allowed to buy or sell tokens or "virtual currencies" or act as a central counterparty. It is not allowed to provide pricing or pricing for tokens or "virtual currencies". Information intermediary and other services.
Under the high-pressure situation, the shadow hanging over the heads of currency speculators is difficult to dissipate. An insider predicts that players who participate in currency speculation may experience being blocked for the first time in their lives in the past year or two.
Since June and July of this year, there have been rumors in the currency circle about frozen cards or frozen Alipay during digital currency transactions. If we carefully summarize this information, we will find that in the final analysis, it is because virtual assets, especially virtual assets, have been frozen. It is the money laundering risk caused by stablecoin transactions that is the most prominent. I think this is the fundamental reason why the entire currency circle is still stuck in the wave of card freezes up to now.
Regarding antifreeze cards, I also wrote some strategies in the early days. Friends who are interested can read the previous article. In today’s article, we mainly talk about how everyone bought it in the currency circle but dare not sell it, even if they make a profit. The most embarrassing thing about this situation that dare not cash out is that Bitcoin has hit new highs recently. Under such a good market, the wave of frozen cards is like a sharp sword, hanging on every person who participates in currency speculation. On the player's head, neither advance nor retreat.
The wave of frozen cards is unavoidable. It may be just the beginning now, and more stringent measures will come later!
Since the birth of the entire digital currency trading, Bitcoin has been particularly prominent. Although in our opinion, the price of Bitcoin has fluctuated hugely, and it does make sense to say that it is a bubble, because Bitcoin has always been supported by no physical assets. Popularity and attributes, artificial speculation, institutional speculation and other operations are indeed very risky, but because of this unregulated attribute, Bitcoin has quickly become the darling of many investors. As such an alternative virtual asset, the price of Bitcoin The temptation to rise all the way up is indeed too strong.
At the same time, the rising value and anonymous attributes have also allowed a large number of criminals to find effective ways. Through Bitcoin, they can do whatever they want, hide their identities, transfer assets, evade foreign exchange management systems and other illegal activities. Because the use of legal currency to purchase digital assets such as Bitcoin is currently completely prohibited in China, various stablecoins anchored to the U.S. dollar at a 1:1 ratio, such as USDT and USDC, have become the basic tools for monetizing transactions in the currency circle. It is precisely because of this that it also provides Those illegals provide and create more convenient and low-risk green channels.
This year, as the Ministry of Public Security, the Central Bank and other departments have joined forces to crack down on cross-border gambling capital chains, money laundering and fund transfers using virtual assets such as Bitcoin and stablecoins have attracted closer attention from regulators, and regulatory measures are more complex than usual. Strictly, once it is involved in the transmission chain of certain illegal funds, such as selling virtual currency at an OTC merchant suspected of being involved, or being judged as an abnormal transaction by the bank, the bank card will be frozen, and the time will be from three days to It varies from two years. 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.
Regarding this point, I believe that everyone has been hearing about the freeze and investigation of digital currency transactions recently. However, some people think that it is too exaggerated. The situation may not be as serious as it is said, but what I want to say Yes, no matter how many versions we hear, many departments have really stepped up their efforts to freeze cards this time, and it is just the beginning.
Amid the wave of frozen cards, although currency prices continued to rise at the end of the year, the industry was in turmoil, and OTC merchants were in danger. In fact, there are many big names in the currency circle who started boldly buying Bitcoin from the early low price. If they then participate in DeFi, there are many people who can earn more than 10 million. However, in view of the many experiences and the current situation of being generally frozen. Rumors made these big investors dare not easily try to cash out, so they had to exchange stablecoins and keep them on the exchange, waiting for the opportunity. It is now December, and the end of the year is approaching. I believe that most people involved in currency speculation want to be able to cash out as soon as possible. However, at this juncture, supervision is becoming more and more stringent. Moreover, there are currently efforts to combat money laundering and cross-border operations. The trend of regulating the flow of gambling funds is also gradually increasing. Therefore, from what I can tell so far, the crackdown on gray behaviors in the currency circle will only be more severe in the future, and there will be no chance to relax in the short term. !
This actually gives us a signal:
“The wave of frozen cards has just begun, compliance is the real way out for the currency industry!”
The risk of card freezing is concentrate
