Joint voice of ten departments

Recently, the central bank and other ten departments jointly issued a notice on further preventing and dealing with the risks of virtual currency trading speculation. The "Notice" clearly stipulates that virtual currency does not have the same legal status as legal tender; virtual currency-related business activities are illegal financial activities; overseas virtual currency exchanges provide services to residents in my country through the Internet are also illegal financial activities; participation in virtual currency There are legal risks in investment trading activities. At the same time, strengthen the risk monitoring and early warning of virtual currency trading speculation, involving all-round monitoring and early warning and the establishment of information sharing and rapid response mechanisms. Build a multi-dimensional and multi-level risk prevention and disposal system.

Finally, the "Notice" mentions the need to strengthen policy interpretation and publicity and education. Specifically, all departments, regions, and industry associations should make full use of various media and other communication channels to publicize to the public the illegality of virtual currency speculation and other related business activities through legal policy interpretation, typical case analysis, and investment risk education. Sex, harmfulness and its manifestations, etc., to enhance the public's awareness of risk prevention.

It is understood that the relevant person in charge of the People's Bank of China stated that in recent years, virtual currency transactions such as Bitcoin have become popular, disrupting economic and financial order, breeding money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities, and seriously endangering the safety of people's property. my country's regulatory policy on virtual currency is clear and consistent. The "Notice" once again emphasizes that virtual currencies that are issued by non-monetary authorities, use encryption technology, distributed accounts or similar technologies, and exist in digital forms, such as Bitcoin, Ethereum, etc., including so-called stable coins such as TEDA, are not allowed. It has the same legal status as legal tender and cannot be circulated in the market as currency.

All departments and regions will conscientiously implement the various measures proposed in the "Notice", build a long-term working mechanism of central overall planning, territorial implementation, integration of divisions, and joint responsibility, always maintain a high-pressure situation, dynamically monitor, and deal with related risks in a timely manner. Resolutely curb the hype of virtual currency transactions, severely crack down on illegal financial activities and criminal activities related to virtual currencies, protect the property safety of the people in accordance with the law, and fully maintain economic and financial order and social stability.

The name "Smart Contract Mutual Assistance" is actually "Virtual Currency MLM"

In recent years, virtual currency pyramid schemes have become a key target to prevent criminals from carrying out illegal and criminal activities under the banner of the blockchain, resulting in damage to the property of the people. Once discovered, it will be severely cracked down to prevent resurgence.

Recently, under the guidance of the Economic Investigation Team of the Jiangsu Provincial Public Security Department, the Economic Investigation Detachment of the Yancheng Public Security Bureau discovered that the criminal suspect Peng and others developed the "MMMdefi" platform, using blockchain smart contract technology to make the logic code of the pyramid scheme rules in the chain. executed automatically. It is understood that from February to April this year, the platform has developed a total of more than 50,000 members, with more than 100 levels, and the amount involved has reached more than 1 billion yuan. On April 23, the police handling the case went to Beijing, Zhengzhou, Chengdu and other places to carry out centralized network collection, smashed the MLM criminal gang under the banner of blockchain in one fell swoop, and arrested 16 suspects.

MMMDeFi is the abbreviation of MMM Decentralized Mutual Aid Finance. MMM was once the largest mutual aid scam on the Internet, defrauding Chinese people of tens of billions of assets. It is not difficult to see from the name that the project wants to attract members who have participated in the MMM project through the "headline party", so that this illegal fund can attract the attention of "investors" in a short time.

The project itself has no profitability. Under the guise of "mutual aid, mutual love and helping others", it relies on "investors" to recharge money and develop offline maintenance, and to package the so-called innovation in a model that is absolutely safe and resolves traditional financial risks. However, no amount of publicity can conceal the essence of "drumming and spreading flowers" fund-based pyramid schemes.

MMMDeFi claims that it has no policy risks and will not run away. Using operations and operations such as "blockchain smart contracts + financial model mechanisms + people donating to each other", it can subvert the traditional centralized financial order and achieve everyone's wealth.

But in the final analysis, this is a "Ponzi scheme", and MMMDeFi is an imitation of MMM. The way to make money is simple and rude - "get rich when you make money", "get rich when you pull people's heads".

Stimulated by huge profits, "investors" crazily deposit money into the platform, and at the same time persuade relatives and friends around them to join, that is, "development offline". The commonality of the organization requires continuous fresh blood to join. Once no new people join, it will face collapse at any time.

In order to facilitate deception, such projects usually package themselves as being joined by world-renowned blockchain projects, financial institutions, economists, and technical experts, and publicize them on the Internet to defraud the public's trust.

Prevent virtual currency pyramid scheme crimes

In recent years, the development of members through the Internet platform has become a new type of MLM activities and has gradually become the mainstream. The proportion of online MLM crimes using "blockchain" and "mining" as gimmicks has increased. Compared with traditional pyramid schemes, this contactless, networked, and decentralized form of pyramid schemes is more concealed, more widely spread, and more harmful. This type of network MLM has the characteristics of non-contact and one-to-many. Some network MLMs have grown to hundreds of thousands of people in just a few months, and some have broken through a million.

At the same time, virtual currency online pyramid schemes also show a variety of crimes intertwined. Some online pyramid schemes are intertwined with traditional aggregated pyramid schemes, telecommunication fraud, illegal fund-raising and other illegal activities, which undermine social stability and cause a series of hazards such as capital outflows. .

In order to confuse the public, usually in the initial stage of online pyramid schemes, they will apply for business licenses as usual, open websites, apps, WeChat public accounts, etc., and some choose to do "short-term" business in order to quickly cheat money, quickly make a new platform to change their appearance, and re-defraud money. And these projects confuse concepts such as blockchain and virtual currency with financial content such as finance and currency. It is difficult for non-professionals to distinguish true from false, and they are extremely deceptive.

The security team of Zhifan Technology has been using its own platform to expose the criminal routines using the concept of blockchain to the public, and to study new criminal methods and models of virtual currency. Zhifan Technology security experts believe that the use of virtual currency network MLM is still the old routine. Maintain capital flow by developing downlines to achieve the purpose of embezzling public deposits. Virtual currency online pyramid schemes usually have the following characteristics: 1. Use blockchain gimmicks to package and hype, thereby deceiving investors; 2. Pay a certain amount of virtual currency as an entry fee; 3. Criminal organization, specialization, and concealment 4. Pulling head model, deep hierarchy, using hierarchical team compensation; 5. Fast development and strong replicability.

Zhifan Technology security experts reminded: "Blockchain technology and virtual currency hype are not the same concept. For investors, they should be alert to all kinds of illegal fundraising, pyramid schemes, and fraudulent scams in the name of blockchain, and don't blindly believe in high-value money. Promise of profits, establish correct currency and financial concepts, and avoid blindly following the trend of investment.”