The People’s Bank of China (PBoC) announced the main, in its opinion, problems of the cryptocurrency industry and urged citizens not to perceive Bitcoin as a “safe haven” – the asset is too volatile for this. The 8btc portal writes about this with a link to a document that was published on the regulator’s official WeChat page.
In the document “Protecting the Rights and Interests of Consumers of Financial Services”, the regulator listed the main problems of the cryptocurrency market: overstated trade volumes, malicious disruptions, and money laundering.
Inflated trading volumes. According to the PBoC, the average turnover of China’s three largest cryptocurrency platforms that are registered overseas is significantly higher than the average turnover of other licensed overseas platforms. This, according to the regulator, indicates a large number of transactions carried out by bots.
This is not the first time they mention the artificial pump of trading volumes. For example, in the spring of last year, the research company The Tie published a report according to which 50% of the data on the trading volume of cryptocurrencies is unreliable.
This problem concerns not only Chinese exchanges. In the fall of the same year, a trader from Argentina announced that the volume of fake transactions on the BitHumb cryptocurrency exchange was $ 250 million. He drew attention to the fact that such transactions are concluded at exactly 11 am South Korean time.
Malicious crashes. The regulator believes that some cryptocurrency exchanges deliberately disable their services in order to liquidate trading positions with leverage at a convenient moment. As an example, PBoC cites an unnamed platform, whose system went offline six times a year. At the same time, the nature of the three failures remained unclear.
This problem is more urgent today than ever. Due to the collapse of the cryptocurrency market, the infrastructure of some exchanges went out of order. So, for example, the BitMEX cryptocurrency exchange has been trying for the second week in a row to prove to its customers that its team was not involved in the failure.
Laundering of money. The central bank specialists analyzed the data on the withdrawal of funds from cryptocurrency exchanges and came to the conclusion that some of these transactions correspond to the parameters typical for money laundering operations obtained by illegal means.
Money laundering is another hot topic of discussion in China. Earlier this month, the US Department of Justice indicted two Chinese citizens who allegedly laundered money for North Korean hackers. The US authorities believe that Tian Yingying and Li Jiadong laundered $ 100 million worth of cryptocurrency.