Domestic RWA deemed illegal financial activity

Written by: Martin

Seven Associations Jointly Remind: Protect Your “Wallet,” Stay Away from Illegal Virtual Currency Activities—Behind the Promise of High Returns Often Lies an Unfathomable Risk Whirlpool.

Recently, concepts related to virtual currencies have been heating up rapidly. Some criminals take advantage of this by hyping up trading and speculation activities, disguising them as “stablecoins,” “air coins,” “real world asset tokens,” and “mining,” to engage in illegal fundraising, pyramid schemes, fraud, and other illegal activities.

On December 5, seven associations including the National Internet Finance Association of China jointly issued a risk warning, reminding the public to stay away from illegal virtual currency activities.

Virtual currencies do not have legal currency status. They are not issued by monetary authorities, are not national legal tender, and cannot be used as currency in circulation within China. Among them, “air coins” such as Pi Coin lack substantive technological innovation, have opaque issuance and operation mechanisms, and are plagued by serious fraud and market manipulation issues.

As a form of virtual currency, “stablecoins” cannot effectively meet requirements for customer identification, anti-money laundering, etc., and are at risk of being used for money laundering, fundraising fraud, and illegal cross-border fund transfers.

Tokenization of real world assets carries multiple risks, including fake assets, business failures, and speculative hype. No such activities have been approved by China’s financial regulatory authorities.

The seven associations require their member institutions not to participate in the issuance or trading of virtual currencies or real world asset tokens within China, nor directly or indirectly provide related services to clients.

The general public should enhance risk awareness, protect their “wallets,” avoid participating in virtual currency-related activities, be wary of false promises of high returns, and refrain from clicking links or scanning QR codes from overseas trading platforms.