Just on September 24, the central bank and other departments issued the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" (hereinafter referred to as the "Notice"). For a while, it aroused heated discussions and opinions were divergent. Today we will talk about the focus of this round of policy.

Before the main text, let's discuss with our friends from Chain Audit Technology:

secondary title

1. The purpose of the introduction and the preceding method

We believe that the purpose of the introduction of the new regulations is: virtual currency hype resurgence, a large number of behaviors that disrupt the financial order have occurred, and this time we have learned lessons from the long fermentation period of risks in the online lending industry.

According to the "Notice", the preposition laws of the new regulations include "Banking Law", "Commercial Banking Law", "Securities Law", "Network Security Law", "Telecommunications Regulations", "Regulations on Prevention of Illegal Fund Raising", "Futures Trading Management Regulations" No. 38 and Document No. 37. It can be seen that the logical starting point of this round of regulations is actually the strong financial attributes of virtual currency, which is to oppose virtual currency becoming a financial product (currency, securities, commodities, CDS, etc.). Anti-money laundering is the focus of our work this year, and it is also the expectation of the international community. The anonymity of virtual currency makes it the first choice for illegal transactions. In a kidnapping case handled by a colleague of Sister Sa, the ransom demanded by the kidnapper was Bitcoin. In order to spend the illegally traded virtual currency, a medium of exchange and an information intermediary are needed. This round of re-regulation may have something to do with virtual currency becoming an important tool for money laundering.

secondary title

2. What's the difference?

For readers, the question you are most concerned about is how different the "Notice" issued this time is from the previous policies and norms. After careful analysis, there are mainly the following seven points:

(1) Directly point out that USDT is a virtual currency and is not protected by Chinese laws. The first article in the "Notice" clearly classifies TEDA, that is, USDT, into the category of virtual currency, and at the same time specifies that virtual currency is not legally compensable, and should not and cannot be used as currency in the market.

(2) It is also illegal to provide "pricing services" for virtual currency and will be banned in the future. Article 2 of the "Notice" stipulates: "Virtual currency-related business activities are illegal financial activities. Carrying out legal currency and virtual currency exchange business, exchange business between virtual currencies, buying and selling virtual currency as a central counterparty, and providing information for virtual currency transactions Intermediary and pricing services, token issuance financing, and virtual currency derivatives transactions and other virtual currency-related business activities are suspected of illegal sale of token coupons, unauthorized public offering of securities, illegal futures business, illegal fund-raising and other illegal financial activities, all of which are strictly prohibited. Resolutely ban it according to the law.” It can be seen that even doing “pricing services” for virtual currencies is considered an illegal act, and thus has corresponding legal risks.

(3) The "information intermediary" model of virtual currency transactions has come to an end, is no longer gray, and has been classified as illegal. Similar to "pricing services", the "Notice" also clearly identifies the provision of information intermediary services as an illegal financial activity, affirming the illegality.

(4) Domestic personnel of overseas exchanges cannot evade legal responsibilities. The "Notice" not only affirms that the provision of services by overseas virtual currency exchanges to Chinese residents through the Internet is also an illegal financial activity, but also stipulates that the domestic staff of relevant overseas virtual currency exchanges should be held accountable according to law.

(5) Contracts involving virtual currency investment transactions are invalid on the grounds that they violate public order and good customs. The "Notice" pointed out that there is a legal risk in participating in virtual currency investment and trading activities, because once the activity violates public order and good customs, according to the provisions of Article 153, paragraph 2 of the "Civil Code", the civil legal act is invalid and the loss shall be borne by itself.

(6) The concept of encrypted assets will become a "sensitive vocabulary" and will be focused on in this round of regulation. Article 11 of the "Notice" stipulates that "the market supervision department shall strengthen the registration management of market entities, and the registered names and business scope of enterprises and individual industrial and commercial households shall not contain words such as 'virtual currency', 'virtual assets', 'encrypted currency', and 'encrypted assets'." or content.” It can be seen that terms such as encrypted assets have become “sensitive words” for regulators.

secondary title

3. Focus on the type of business that will be banned or even blamed

After summary, the types of businesses that may be banned or even suspected of committing crimes are as follows:

(1) Legal currency and virtual currency exchange business, including foreign legal currency;

(2) Exchange business between virtual currencies;

(3) Information intermediary business for virtual currency transactions;

(4) The business of pricing virtual currency transactions (Sister Sa believes that display pricing may also be included in the circle, and it is recommended that relevant companies minimize unnecessary risks);

（5）ICO;

（6）DeFi;

(7) Publicity media for virtual currency transactions;

(8) Third-party payment companies provide payment and settlement services for virtual currency-related businesses;

(9) Blockchain technology companies provide technical support for virtual currency business, including so-called technology neutral behavior;

secondary title

4. With regard to "mining", a thorough conclusion has been given

write at the end

write at the end

The new regulations once again show the attitude of the regulatory authorities, clarifying the “grey area” that has not been clearly defined in the market in the past period of time, and putting an end to the fantasies of speculators. However, in view of the potential for profit from fluctuations in currency prices, virtual currency transactions and financial management may become invisible in the future, forming a "shadow exchange". Only human nature remains unchanged.

As above, thank you readers!

The text comes from the official account: Xiao Sa lawyer