Beijing Warns Against Unregulated Cryptocurrency Investments

Beijing Internet Finance Industry Association issued a warning against unregulated cryptocurrency investments on July 12, highlighting potential risks related to stablecoins and digital assets.

This warning emphasizes the potential dangers posed by unregulated cryptocurrency activities, urging the public to exercise caution and verify legal credentials before engaging with digital asset platforms.

Beijing Highlights Cryptocurrency Fraud Risks in New Alert

The Beijing Internet Finance Industry Association has urged the public to remain cautious regarding investments in cryptocurrency products marketing ‘risk-free profits’ or ‘guaranteed returns.’ The association cited prior cases of fraudulent schemes like PlusToken, emphasizing the recurring threat. The alert highlights that stablecoins and DeFi projects are often used to tempt investors with complex financial jargon. The association underscores that such ventures lack legal approval from China’s financial regulators. Investors are advised to perform due diligence by verifying company licenses through official national regulator resources.

The advisory identifies key risk factors, including false promises and dependence on new investment inflows, suggesting these factors increase the likelihood of activities resembling Ponzi schemes. Moreover, the public is encouraged to report activities suggestive of illegal fundraising. The alert prioritizes transparency and adherence to legal standards as non-negotiable for ensuring consumer safety.

“The public is advised to verify company licenses using national regulator resources. Be highly vigilant for investment projects advertising ‘risk-free profits’ or ‘principal guaranteed interest.’ High returns always carry high risk. Please stay away from cryptocurrency hype, illegal token issuance, and unauthorized digital asset investments. If evidence of illegal fundraising is discovered, report to regulatory or law enforcement authorities immediately.”

There has been limited public reaction from significant cryptocurrency figures like Vitalik Buterin or Changpeng Zhao. This alert, while not causing immediate market fluctuations, underscores ongoing regulatory scrutiny, especially in unstable financial terrains, posing a potential deterrent to exuberant market behaviors.

China’s Warning Indicates Stricter Crypto Regulations Ahead

Did you know? The PlusToken scandal from 2019, which involved approximately 200,000 Bitcoin and 9 million Ethereum, demonstrates the significant risks posed by unregulated cryptocurrency schemes.

Bitcoin, with a current price of $117,575.60 and a market cap of $2.34 trillion, has seen a 0.40% decrease in the last 24 hours. Its market dominance is at 63.89%, with a 24-hour trading volume of $49.37 billion, down 60.08%, attributed to CoinMarketCap.

According to insights from the Coincu research team, China’s cautionary stance likely indicates increased scrutiny and regulation in cryptocurrency markets. It warns investors to be vigilant, expecting stricter financial checks and a potential slowdown in speculative crypto investments due to these ongoing advisories.