This article comes from: Tencent News "Qianwang", author: He Wen, original title: "The shadow of frozen cards hangs over the cryptocurrency circle: I made more than 10 million yuan by speculating in cryptocurrencies but I dare not cash it out", title picture comes from: Visual China
"I made four transactions and my bank card was frozen three times. The last time I chose Alipay, but it was frozen again because the system determined that the transaction was abnormal."
They buy but dare not sell, and the profits are difficult to turn into real wealth. When the price of Bitcoin has repeatedly hit record highs, similar experiences are like a dark cloud, hanging over the heads of every cryptocurrency player.
Since its birth, despite the frequent huge price fluctuations, Bitcoin has become a well-known alternative asset that is known and traded by more and more people, and its price has been rising steadily. On the other side of the coin, the semi-anonymity of Bitcoin has become a hotbed for some criminals to hide their identities, transfer funds, and evade foreign exchange controls. Especially since 2017, when many countries including China cut off the channels for purchasing Bitcoin and other digital assets with legal currency, various stablecoins such as USDT and USDC, which are 1:1 anchored to the US dollar, have become basic tools in the currency circle, providing a more convenient and risk-free channel for the above behaviors.
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.
Under the wave of frozen cards, although the price of coins has been rising steadily at the end of the year, the circle is in a state of panic, and OTC merchants are all in danger. A senior player complained to Tencent News "Qianwang" that he boldly bought Bitcoin from the low point in March, and then bet on some DeFi concept assets, making more than 10 million this year, but the experience of friends around him who had their cards frozen made him dare not easily try to cash out, so he had to exchange it for stablecoins and keep it on the exchange.
"In the past few years, there were not so many people in the cryptocurrency circle, so KYC was easier to do. However, in the past two years, there have been good and bad people in the circle. Some fraud, gambling and even drug-related funds are trying to launder them using virtual currency through various disguises, and you will fall into the trap if you are not careful." An OTC merchant specializing in over-the-counter transactions of virtual assets described to Tencent News' "Qianwang" that although this part of the funds accounts for a very small proportion, once involved, the entire upstream and downstream of the fund transmission chain will be implicated, resulting in frozen cards or even more serious consequences.
Tencent News' "Qianwang" learned from people close to the regulator that the central bank and the State Administration of Foreign Exchange have already had perfect regulatory methods for the aforementioned risks, and there are also special departments directly responsible. "For example, on the day when the white paper of the quasi-stablecoin Libra was released, we asked them to explain the risks." With the trend of increasing supervision of anti-money laundering and combating cross-border gambling capital flows, the crackdown on gray activities in the currency circle will only be stricter in the future.
This also means that the card freezing trend may just be the beginning. "Compliance is the only way out in the future." The co-founder of a leading exchange told Tencent News "Qianwang" that the exchange needs to do a good job of checking at the source and conduct more stringent review of the qualifications of OTC merchants.
"Everyone, cat and dog, came in"
The money laundering risk caused by virtual assets, especially stablecoins, is the fundamental reason why the entire cryptocurrency circle is caught in a card freezing wave.
A founder of a virtual asset wallet told Tencent News’ “Qian Wang”, “The biggest problem in the past two years is that anyone and everyone has entered the cryptocurrency circle, and we cannot get involved with these people.” Another merchant who has been engaged in OTC for many years complained that when he first started in this business, the most he did was to review his customers to prevent telecommunications fraud funds. However, due to the rise of overseas gambling and pig-killing schemes, these “anyone and everyone” have money involved in gambling or even drugs, and they want to achieve the purpose of cross-border fund transfer or money laundering through over-the-counter transactions.
“If you are not careful, there will be a 37-day package waiting for you, or even direct criminal prosecution.” The merchant described that a colleague of his was treated as a gambling fund intermediary because he did not implement KYC thoroughly. He was released only after he cooperated with the public security department’s investigation for 37 days to prove that he was ignorant of the matter. The bank cards of cryptocurrency traders 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 situation of combating 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 current economy, the risks to economic and financial security are constantly increasing. From the perspective of criminal forms, some gambling gangs use virtual currency to collect and transfer gambling funds, and even in some parts of Myanmar, they use investment as an excuse to conduct online gambling. This new type of channel cannot be frozen, and it is difficult to trace the source anonymously, which brings great challenges to the crackdown.
The central bank disclosed in October that the People's Bank of China Huizhou City Central Sub-branch assisted the local police in cracking a cross-border online gambling case using the virtual currency Tether (USDT). 77 suspects were arrested, 3 gambling websites were destroyed, and the amount involved was nearly 120 million yuan. This case not only circulated within bank accounts, but also involved virtual currencies, and through multiple laundering, the direction of funds was extremely hidden.
"We are now trying pure transactions. Simply put, every payment and every coin handled must be reviewed individually, but this is just an ideal. If every transaction needs to be reviewed, 99% of users will basically be blocked out." The founder of the aforementioned virtual asset wallet said that with stricter supervision, it is becoming increasingly difficult for OTC merchants to do business.
In order to avoid bank cards being frozen, cryptocurrency traders have summed up a lot of experience. For example, do not use salary cards or credit cards for trading. If they are frozen, mortgage and car loans will be cut off, and credit reports will also be affected. Do not use cards from large banks because risk control is more stringent.
A similar experience is that the cash flow must be overnight. A more advanced approach is to buy and sell through different bank cards, and immediately use the funds from selling coins to buy financial products, which can then be withdrawn.
The crackdown will only get more severe
But no matter how merchants and players try to circumvent it, due to the gray identity of virtual currency and its difficult-to-break connection with illegal funds, the card freezing trend may just be the beginning.
A regulator close to the central bank told Tencent News’ Qianwang that the current regulatory approach is still “everything is handled in accordance with the notice of the seven ministries and commissions.” In 2017, the central bank and seven other ministries and commissions announced that it is strictly prohibited to exchange “virtual currencies” with each other, to buy or sell tokens or “virtual currencies” or to act as a central counterparty to buy or sell tokens or “virtual currencies,” and to provide pricing, information intermediary and other services for tokens or “virtual currencies.”
Under the high pressure situation, the shadow hanging over the heads of cryptocurrency speculators is hard to dissipate. An insider predicted that cryptocurrency speculators may experience their first card freezing in the next one or two years.
Since June and July of this year, there have been rumors in the cryptocurrency circle about frozen cards or Alipay accounts during digital currency transactions. If we carefully summarize this information, we will find that the money laundering risks caused by virtual assets, especially stablecoin transactions, are the most prominent. This is the fundamental reason why the entire cryptocurrency circle is still caught in the wave of frozen cards.
Regarding anti-freeze cards, I have written some strategies in the early days. Friends who are interested can go and look at the previous article. In today's article, we will mainly talk about the situation that everyone bought in the currency circle but dare not sell, and dare not cash out even if they made money. Now the most embarrassing thing is that Bitcoin has repeatedly set new highs recently. Under such a good market situation, the card freezing trend is like a sword, hanging over the heads of every player in the currency circle who participates in currency speculation. It is impossible to advance or retreat.
☞The card freezing trend is inevitable. This may just be the beginning, and stricter measures will come later!
Since the birth of the entire digital currency transaction, Bitcoin has been particularly prominent. Although in our opinion, the price of Bitcoin fluctuates greatly, it does make sense to say that it is a bubble, because Bitcoin has never been backed by physical assets. Based solely on its popularity and properties, artificial speculation, institutional speculation and other operations are indeed very risky. However, it is precisely because of this unregulated attribute that Bitcoin has quickly become the darling of many investors. As such an alternative virtual asset, the price of Bitcoin has been rising all the way, and the temptation is indeed too strong.
At the same time, the rising value and anonymity of Bitcoin have also allowed a large number of criminals to find an effective way to do whatever they want through Bitcoin, hiding their identities, transferring assets, evading foreign exchange management systems and other illegal activities. Because it is currently completely prohibited in China to use legal currency to purchase digital assets such as Bitcoin, various stablecoins that are 1:1 anchored to the US dollar, such as USDT and USDC, have become the basic tools for currency transactions to realize cash, and precisely because of this, it has also provided and created a more convenient and low-risk green channel for those criminals.
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 freezing and investigation of digital currency transactions recently. However, some people think that it is too exaggerated and the situation may not be as serious as it is said. But what I want to say is that no matter how many versions we hear, in short, many departments have really increased their efforts in this card freezing wave, and it is just the beginning.
Under the wave of frozen cards, although the price of coins has been rising steadily at the end of the year, the circle is in a state of panic, and OTC merchants are all in danger. In fact, there are many bigwigs in the current currency circle who have boldly bought Bitcoin from the early low price. If they then participate in DeFi, many people can make more than 10 million. However, given the many experiences and rumors of frozen cards, these bigwigs dare not easily try to cash out. In the end, they have to exchange them for stablecoins and put them on the exchange, waiting for the opportunity. It is already December, and it is near the end of the year. I believe that most people who participate in currency speculation want to be able to cash out quickly, but at this juncture, the regulatory trend is becoming more and more stringent, and the current trend of anti-money laundering and anti-cross-border gambling capital flow supervision is also gradually increasing. Therefore, as far as I can know at present, the crackdown on gray behaviors in the currency circle will only be more severe in the future, and there will be no chance of relaxation in the short term!
This actually gives us a signal:
“The card freezing trend has just begun. Compliance is the real way out for the cryptocurrency industry!”
☞The risk of card freezing is concentrated in stablecoin transactions, that is to say, stablecoin is the perfect container for money laundering!
We all know that Bitcoin, as the leading digital currency asset, is expensive, but its price fluctuates greatly and its transaction speed is relatively slow. These defects have also created great obstacles for those money laundering criminals and cannot provide them with effective security protection. Therefore, they currently basically put their money on stablecoins that connect legal currency and virtual assets, because stablecoins can provide value preservation properties in the volatile virtual asset market, and they are also the base currency of the currency circle. Through the operation of stablecoins, they can also conduct illegal money laundering operations more efficiently and safely!
Although those lawbreakers have discovered this convenience, domestic regulators have long been aware of the risks posed by stablecoins.
This is why many participants whose cards were frozen exchanged the relevant digital assets for USDT to withdraw funds, which led to the freezing of their cards.
At present, in my opinion, there is indeed a certain regulatory risk in exchanging stablecoins for withdrawals, because the focus of this wave of regulation is on the regulation of stablecoin transactions and circulation. For those small currency transactions, it does not have much impact. If the withdrawal amount is too large, there is indeed a risk of card freezing when using USDT to withdraw funds. However, if you can have familiar traders and merchants before withdrawing funds, and you can fully understand their source of funds, your card will not be frozen.
☞The card freezing trend is just the beginning. Unless you comply with the regulations, this high-pressure situation will remain for a while!
Judging from the current situation, most of the methods summarized by the authors are based on corresponding solutions of management methods, but we can only guard against the categories and channels of supervision. How can we fully identify and distinguish the source of funds?
Therefore, these methods are only temporary solutions and not fundamental solutions. It is definitely impossible to completely ignore the regulatory trend, but if we can try to reduce the number and frequency of transactions, this may be the most effective way to prevent card freezing.
In fact, to put it bluntly, "If you don't trade, your card can't be frozen."
This is obviously unrealistic. Cryptocurrency trading is all about performance. If you don’t perform, are you just holding on to those virtual currencies and waiting to turn them into “happy beans”?
Therefore, this year is really a big test for the cryptocurrency circle. Although it is a good thing, the overall environment makes everyone worried and they don’t know how to deal with it. I am actually the same. I bought 50,000 Bitcoin when it was just over 15,000. So far, I have not lost money and have earned at least 10%, but what’s the use? Now Bitcoin has broken a new high again, and I think it’s okay. In my understanding, if Bitcoin can break 20,000 at the end of last month, I will hold it until next year and wait for the big bull. If not, even if it breaks a new high, I will sell it. Now at the point I mentioned, I am also hesitating. There are risks in withdrawing money, especially Bitcoin. It is really entangled. If I don’t sell it now, there will be a large correction immediately. So these two days I have been consulting some friends to see if there is a safe way to make about 10%, I am already very satisfied.
At the same time, we do hope that the domestic digital currency trading can improve the regulatory system as soon as possible and comply with the regulations as soon as possible, so that we can also participate in digital currency investment freely. Otherwise, there will always be too many troubles. #币安合约锦标赛 $BTC