“I have a hunch that the industry will have a big reshuffle.” Wang Ying (a pseudonym) revealed that she was ready to leave the coin circle.

On the second day of the new year, the CBRC said that it would carry out nationwide publicity activities to prevent illegal fund-raising, mainly in the name of blockchain. This is only one and a half months since the last CBRC prompt to prevent the risk of illegal fund-raising in the name of “blockchain”. Previously, the central bank and other departments, as well as financial regulators in Beijing, Shanghai and Shenzhen, issued risk tips on virtual currency exchanges.

According to the statistics of the Beijing News reporter, since the end of 2019, more than 6 newly discovered domestic virtual currency trading platforms have been forcibly closed. Including the BISS (currency market) illegal fund-raising fraud uncovered by Beijing police. At the same time, more exchanges took the initiative to shut down.

However, the reporter’s investigation found that under strong supervision, there are still many exchanges committing crimes against the wind, and the new routine of “cutting leeks” is frequent. IMO, IFO, dual currency financial management, currency deposit and interest generation, and money circle in fund game are in the limelight. There are many big money circle figures such as Wu Jihan and sun Yuchen behind them; The project side can operate the exchange and manipulate the currency market for 60000 yuan; Alipay, WeChat, bank cards and other payment channels have been repeatedly banned.

Routine 1

New names IMO and IFO are suspected of pyramid selling

“In the past, the popular ICO can’t cut the leeks,” said Wang Ying, who once served as an executive in two head virtual currency exchanges. “When an idea can’t cut the leeks, it’s a new idea.”.

What routines does the virtual currency exchange have

Beijing News reporter found that the current popular illegal fund-raising methods in the currency circle include IMO and IFO.

IMO (initial miner offering) means the first miner offering, which means issuing tokens by selling hardware / miner for the first time. Such projects have been regarded as illegal by law, because IMO generally has the nature of MLM, forms a hierarchy in a certain order, and takes the number of development personnel as the basis for compensation and rebate. For example, in August last year, the court ruled that it was “buying and distributing coins” for MLM.

After the above-mentioned forms were hit by regulation, a new variant of IMO “intitial model offering” became popular. Generally speaking, each virtual currency project needs to go through the links of fund-raising, development and market, and the new IMO is a private placement platform (coin circle private placement, where the virtual currency issued by a project is raised at a specific price for specific investors before it is on the exchange), which can enable the project to obtain phased benefits through continuous limited private placement.

A team called imoex claims to be building an IMO ecological platform. The platform is suspected of issuing coins. According to its global partner recruitment announcement, IMO token is the platform currency used in IMO ecology. The total issuance of platform coins is 5 billion, of which 2 billion are private placement by partners and 3 billion are IMO mining.

“It’s a lot of money that has been sold over 1 hundred million. 5 billion, how many zeros have they counted?” Wang Ying can’t make complaints about “Tucao”.

At present, the IMO virtual currency exchange has launched many projects, and some projects have been financed 33 times.

Recently, the reporter contacted the project customer service as an intended investor. The customer service said that after an investor subscribes to the virtual currency of an IMO project, the subscribed virtual currency will be “locked”, that is, it can not be sold in the IMO exchange, and will be “unlocked” according to a certain proportion every day. If an investor wants to sell as soon as possible, he needs to invite more people to subscribe, Unlocking reward is to unlock the locked part of the invitee according to the proportion subscribed by the invitee. The invitee will also receive a “rebate” and return it to IMO wallet in the form of virtual currency as a reward. The more people invited, the higher the level of the invitee, the higher the level, and the higher the daily unlocking proportion and “rebate” amount.

In other words, if subscribers want to sell their virtual currency as soon as possible and obtain higher benefits, they need to “pull their heads”. Under this mechanism, many subscribers have the motivation to “pull their heads”.

After the reporter of Beijing news was pulled into the IMO promotion group by customer service, many “old people” in the group sent to subscribe for the QR code and said that “I must subscribe with this QR code before I can get the unlocking reward”.

Some investors in the group call themselves “students” and are learning the investment method of virtual currency.

“There is a three-tier pyramid structure of personnel. The behavior based on the number of development personnel is suspected of pyramid marketing. If it really involves college students, it will cause adverse social impact and must be treated with caution,” said Xiao SA, director of the Law Research Society of the Bank of China (3.720, 0.03, 0.81%).

At the same time as IMO, another popular financing method is IFO (initial fork offering), which refers to the generation of new tokens by forking mainstream cryptocurrencies such as bitcoin. The hot spot of this popular IFO mode is Libra, betting on the online time.

An investor the reporter met through the IMO promotion group recommended an IFO project to the reporter. The trading platform named coinflex opened the pre-sale of the project in October 2019. Registered IFO participants can buy Libra contract at a preferential price of US $0.3. The Libra contract price represents the probability that investors believe that Libra will go online before the contract settlement on December 31, 2020. For example, if investors think Libra has an 80% chance to go online before contract settlement, they will buy Libra contract with us $0.80. Libra is successfully launched before the contract delivery, and investors will get Libra at 80% of the price. If Libra fails to go online, investors will not get any return. Investors can choose to long and short Libra contracts to reflect market expectations for Libra.

“I have internal information about Libra, and I have invested 600000 Yuan myself. It’s right for you to follow me to short,” the investor encouraged the reporter.

Routine 2

Wu Jihan is invisible behind the regulatory roll call of dual currency financial management

On December 27, 2019, in the tips on further preventing the risk of virtual currency trading activities issued by Beijing Securities Regulatory Bureau, the two financial services launched by the exchange, dual currency financial management and zero interest lending, were named.

“Recently, with the promotion of blockchain technology, there are signs of resurgence of virtual currency trading activities in China. Some virtual currency trading platforms provide virtual currency trading services to domestic residents and launch zero interest lending, dual currency financial management and other projects through digital currency mortgage, which seriously violates the regulations issued by seven ministries and commissions such as the people’s Bank of China The announcement on preventing the financing risk of token issuance is suspected of engaging in illegal financial activities and disturbing the economic and financial order, “said the risk prompt.

The named dual currency financial management was initiated by matrixport, a digital asset financial service platform, and went online on October 23, 2019. Dual currency financial management determines the settlement method according to the “linked price” to ensure that one of the two virtual assets can obtain income. For example, BTC / usdc dual currency financial management, the linked price is “8000 USD”. When the market price of BTC is lower than 8000 USD, it will be priced and settled by BTC, resulting in more income; When the market price of BTC is higher than 8000 USD, it will be priced and settled in usdc, resulting in more revenue.

Behind matrixport is bitland, the largest miner. Ge Yuesheng, co-founder of bitland and CEO of matrixport, said in an interview that Wu Jihan and bitland themselves are matrixport shareholders.

In November 2019, ufex trading housekeeper also launched the first phase of u Bao dual currency financial product. According to its official introduction, the expected income of the financial product is 120%, which “breaks through the new high yield of similar products in the industry”.

Matrixport, another lending business named this time, also has a layout. According to the company’s official website, users can pledge BTC to matrixport (BCH, ETH, LTC and other currencies are launched one after another) to obtain stable currency and legal currency working capital for purchasing mining machines and other expenses.

It is worth noting that not only bitland has focused on virtual currency financial management. Okex, coin security and other virtual currency exchanges have recently launched a number of virtual currency financial products, and their prototypes are similar to yu’e Bao and index funds in the traditional financial market.

In current financial products, users can transfer idle virtual currency assets into products similar to yu’e Bao. Okex launched “Yu coin Bao” and coin an exchange launched “coin an Bao”.

Another popular financial management model is “stacking”. Relevant services are provided by coin an’s “coin an Bao” and gate’s “wealth management Bao”. Similar to it is the cash dividend, which is similar to the dividend in the traditional stock market, represented by fcoin.

Virtual currency financial management may encounter risks such as black box operation and running of the exchange.

Li Qiang (a pseudonym) once invested in the so-called deposit of money to generate interest, but he has been unable to withdraw money. He was judged to be a runaway plostoken, with a loss of 50000.

He revealed many “routines” of plostoken to reporters.

“First of all, what attracts investors is the so-called ‘brick carrying arbitrage’ by buying low and selling high, which claims to be as high as 30%. However, in practice, the currency price difference between exchanges rarely exceeds 15%. In addition, it is difficult to arbitrage due to the consumption of handling fees.” how can investors make money? He revealed that, in fact, it is inseparable from pulling people’s heads. Plutoken encourages the development of offline mechanisms, and pulling people’s heads get dividends. “In fact, what this MLM method earns is the funds invested by later entrants”.

“When the money of the new entrants is not enough to pay the bonuses of the following people, the whole project will collapse. This kind of project is faster than who runs,” Li Qiang said.

In fact, in addition to plutoken, the wallet funds of wave point wallet and idax, the so-called top 20 exchange, have all run away.

“Financial products with high yield and pulling people as gimmicks are the items used by the exchange to circle money and run away,” Wang Ying said. “It’s not charity. How can you make so much money”.

Routine 3

Gambling game is suspected to be a disguised ICO. Sun Yuchen was cut 100 million wave field coins?

Who would have thought that sun Yuchen was also “harvested”.

On December 23, 2019, just.game’s spinach game (i.e. gambling game) was exclusively released in wave field Tron. Just. Game has won the publicity of wave field founder sun Yuchen on Twitter and wechat groups for many times. In a live broadcast, sun Yuchen also showed 100 million wave field coins he will use to participate in the game.

The gift box is a unique token model of just. Game. According to the analysis of the document issued by dapppreview, just. Game is simply a blockchain game about buying, opening and upgrading boxes.

The well-known team and sun Yuchen’s publicity made the game highly concerned by the coin circle at the beginning of its launch. Only two hours after the game was launched, it reached a total flow of 510 million TRX, about US $7.28 million.

However, the game is regarded as “online crash”. After the trading volume exceeds 100 million Trxs, the subsequent new players are basically involved, that is, they lose money. The later they enter the site, the loss also increases. If sun Yuchen invested 100 million wave field coins as he said, according to his admission time, this 100 million will also be “cut”.

In fact, the wave field is closely related to many gaming dapps (decentralized applications). DAPP running on the “wave field” public chain has many gambling applications.

In Wang Ying’s view, such gambling games are disguised ICO, which has little to do with the game itself. An unnamed investor also expressed a similar view. He believes that in addition to the blockchain games such as encrypted cat that emerged at the beginning, the later games such as guessing, MLM and Ponzi scheme actually have nothing to do with the games, but the operation of high-risk funds under the banner of blockchain.

Guessing, MLM and Ponzi investment games account for a higher proportion. Dapppreview data show that as of June 1 last year, the number of guessing dapps was the largest, reaching 299, and the number of risk dapps with MLM and Ponzi investment reached 32, with a total of 331. The number of real game dapps is 85, accounting for only 20% of the total. From the daily trading volume, the top ten DAPP on that day was almost covered by guessing games.

Routine 4

Online air coins can earn more than 100 million full coins and air coins

The familiar routine in the market is air currency. “There is no way to avoid air currency on the exchange.” Cai Yong (a pseudonym), who has provided “market value management” services to many exchanges, said that first, the new currency will bring a large number of real users to the exchange, and second, it is very attractive for the exchange to charge the currency fee of the project party and the subsequent transaction profits.

Taking biki, a widely controversial exchange with multiple air coins on the above line, as an example, the project party will pay 700000-800000 yuan to the exchange at one time. According to biki weekly report, from April to may 2019, an average of 10 new projects will be launched every week. It is speculated that biki will charge a one-time project fee of nearly 300 million according to 400 new projects launched every year.

“Why don’t you do a business that costs a lot of money?” Cai Yong said. Compared with the first tier exchanges, the gas currency over the third and fourth tier small exchanges is more unscrupulous.

Cai Yong analyzed that at present, users mainly buy bitcoin, Ethereum and other mainstream currencies through first-line exchanges, and small exchanges mainly rely on air currency to harvest users. “In fact, users also know that buying coins on small exchanges is risky, but they are willing to gamble. After all, some people have made 100 times.” large exchanges such as okex have also launched air coins, but they get off the shelves in time after discovery.

Cai Yong revealed that many exchanges default to the issuance of air coins.

Wang Ying, a former executive of a large exchange, said that the white papers of these air currency projects are the same, and a third-party writer team can be hired. A white paper may be worth 200000 at the peak and only 5000 yuan at the trough. “It’s all templates anyway. There are only a few technologies in the blockchain. All coin technologies are inseparable. The scenes are easy to be virtual.”

The reporter’s investigation found that in addition to the air coins previously exposed by the media, such as biki, Matcha, VDS, CXC and VBT, the old exchange man coin network with more than 5 million users, and Newton exchange, which once became the second largest exchange in the world, is also suspected to carry out multiple rounds of collection and cutting of users through air coins and capital discs.

Take the Baba coins of mancoin online line as an example. On August 19 last year, 10 million tokens entered the address at the end of 4e1f. Then on August 28, 9.98 million tokens were transferred to the address with the suffix “9dff”. This coin receiving address is the wallet address of mancoin. On December 22, Baba currency fell from the highest high of 1.5usd to 0.04usd, a drop of 95%.

Newton exchange has won the attention of the currency circle by virtue of the currency price of “only rising but not falling”. Its “UPOs trading mechanism” requires users to “brush the price” while brushing the quantity. Users can transfer their virtual currency to the unsealing area, and the currency price will rise 10 times. However, the user’s currency is frozen and can only be unfrozen by repeatedly buying and selling in the “unsealing area”. When the user swipes the order, the buying price must be higher than the last selling price. In fact, taking high dividends as bait, using lock positions to limit liquidity, and then using brush unlocking to enable investors to obtain static income, and using pulling heads and building teams to obtain dynamic income, the capital market of Newton exchange was flooded.

Routine 5

Lawyers with “foreign registered permanent residence” in the exchange: it is still illegal

Recently, many regulators in Beijing, Shanghai, Dongguan, Hangzhou, Shenzhen, Henan and other places have “lit the sword” on virtual currency transactions and virtual currency exchanges. However, the reporter found that at present, many exchanges and project parties will take the company as the main body and have stressed to users abroad that there is no operational risk.

In fact, many exchanges have moved their registration places to Seychelles, Cayman, Singapore and other countries, and domestic companies, including fire currency, do not involve currency.

Xiao SA said that at present, many relevant personnel of the project party who are trying to issue money, the most commonly used routine is “foreign account”, putting the server abroad, carrying out “roadshow publicity” in China and selling money to the Chinese people. But first of all, it should be noted that China does not recognize dual nationality, and the so-called “foreign hukou” does not affect China’s legal regulation of its illegal acts.

“In China, if the actual issuer is a Chinese national and the financing object such as ICO is the Chinese people, such financing behavior is regarded as illegal.” Xiao SA said that the suspected crime is the crime of illegally absorbing public deposits and business crime, and it is alleged that the party who knows the project can get the “private placement share”, and then illegally occupy the money or currency for himself, it is suspected of fraud.

“Some project parties argue that ‘what I finance is not funds, but virtual currency’, but bitcoin and Ethernet used for financing in reality have a certain value and have a relatively mature pricing mechanism. ICO and disguised ICO (IEO) are suspected of illegal public financing,” Xiao SA said.

Zhang Ning (a pseudonym), who works in the head exchange, told reporters that although many projects are registered abroad, they are actually operated in domestic offices, and are concentrated in Shenzhen, Guangdong, Beijing and other places. Many exchanges, including Citex, coin husband, tiger symbol, ccfox, digifinex, coin tiger, etc., operate in Shenzhen office.

According to the documents issued by Shenzhen finance office, eight enterprises suspected of carrying out illegal activities of virtual currency have been interviewed, including Shenzhen digital singularity Technology Co., Ltd. (bitkan), Shenzhen kaipai Network Technology Co., Ltd. (Star home star token), Shenzhen Xingyun Digital Network Technology Co., Ltd. (Xingyun coin), etc.

“The supervision is very accurate this time. You can obviously feel that they know the currency circle very well,” Zhang Ning said. In this context, multiple exchanges have been closed and offline.

Routine 6

The project side and the exchange are “close as one family” and have a team dedicated to “pulling and smashing”

Wang Ying observed that if some air currency projects can not go to large exchanges, they will choose to open their own exchanges, “cutting leeks and running on the road is low and convenient”.

“At present, many exchanges just rely on one or two coins to open specialty stores.”. She revealed that at present, both Huo coin and okex have so-called “partnership plans”. 60000 people can rent the technology of large exchanges and open exchanges with their own domain names.

“This approach lowers the threshold of opening an exchange and makes the currency circle mixed with good and bad people more chaotic,” Zhang Ning said.

According to the reporter, in the whole exchange market, 230 companies closed down in more than half a month. Many exchanges similar to 86bex declared bankruptcy after going online for a week, and most of the projects launched on these platforms have become “zero coins” issued by the exchange itself.

Even if the project party and the exchange are not one, they are “close to each other”.

“In fact, no matter ICO, IMO, IFO or IEO, the exchange is more or less involved in the financing project known as i-o.” Cai Yong has provided “market value management” to many exchanges.

Many internal staff of the exchange told reporters that the exchange will require the project party to carry out “market value management”, which is similar to the “pulling and smashing” of the stock market.

Wang Ying, who once worked in the head exchange, said that the big exchange will not require bitcoin, Ethereum and other mainstream currencies to manage the market value, but those new projects on the line are required to make market value fluctuations by buying and selling. “Otherwise, no one will buy many projects as soon as they are on the line, and the market value is a straight line. It’s too ugly, and no one will buy them later.”

Cai Yong said that the market value management of small and medium-sized exchanges has turned the exchange into “a big casino”. How to manage market value? Cai Yong revealed that market value management is not as simple as what the outside world thinks. The packaging and publicity of new projects are more important. Marketing means must be innovative. The hot spots of fund-raising methods such as “resonance” popular in the industry must be rubbed, and the projects with “very sexy themes” evaluated in the circle will rise.

“A good project also needs a good team”, he said. Generally, a successful market value management team will have very professional marketing talents, and the “talents” who have worked in traditional MLM, capital disk and wechat business are the most popular. “The most popular talent for market value management in the currency circle is the original 3M international MLM team”.

Trading also requires “rigorous planning”. Although a large number of purchases from the secondary market can be pulled, how to ship (i.e. “sell money”) must cooperate with the rhythm of the project party. In the process of shipment, the project side should announce some advantages, such as repurchase, node lock-in and main online line. When the market pays attention and everyone is willing to buy, the market value management team can ship.

He shared with the reporter a process of market value management: the platform cooperated with the project party, arranged the main promotion of the project on the platform, and publicized it every day in the platform telegraph, wechat and QQ group to “ensure the supply of leeks”. After the project goes online, it will be opened at the price of one cent, then quickly pulled to 50 cents, and then make a horizontal rise, that is, a very slow rise. At this time, the project party and the exchange will use their own publicity and media resources to build momentum. With the leek beginning to come in, the project party and the exchange will start to rise from 50 cents and pull to three pieces in a short period, and use the leek to catch up with the rise and kill the fall, Do band shipment in the range of three to five, and finally smash the plate to 20 cents. This operation can make 100 million yuan in 20 million months.

Routine 7

Users can purchase virtual currency through OTC transactions

Reporters noted that, including the fire money, Okex, tiger and other large virtual currency trading platform were on-line “French currency transactions”, most of the virtual currency sellers support Alipay and bank cards, there is also the situation of WeChat payment.

In fact, this practice has been stopped. In October of last year, Zhao Changpeng, CEO, said: the currency exchange will launch OTC (OTC) legal tender transactions to support WeChat’s payment and Alipay’s purchase of encrypted currencies. As soon as the news came out, Tencent and Ali quickly responded that they did not support virtual currency transactions. Since then, the CBRC has repeatedly prompted the risk of illegal fund-raising in the name of “blockchain”.

“The exchange has been blocked by the policy of exchanging legal currency into virtual currency with the help of off-site point-to-point trading, so that it can participate in currency trading on the platform in the future,” said Wang Ying, the aforementioned executive.

After registering as a fire currency user, the reporter clicks on the legal currency transaction page. The user has two choices: one is to buy currency with one click, enter the total purchase amount, and select the currency to be purchased to place an order; The second is optional transaction. Users can see all orders issued by the seller, including quantity, limit, unit price and payment method. Users can choose by themselves. In the notes for transfer, the platform mentioned that BTC and other words related to virtual currency should not be used to prevent bank cards from being frozen. Reporters randomly selected the trading information released in the afternoon of January 4, 2020, and found that among the 52 sellers, most of the virtual currency seller’s payment channel was Alipay, reaching 42. 30 sellers support bank card transactions. At the same time, there are also OTC transactions through wechat transfer, and 14 sellers support wechat transfer.

Alipay said that Alipay was prohibited from trading in virtual currency. If it found transactions involving bitcoin or other virtual currencies, Alipay would immediately stop payment related services, reclaim businesses involved, and limit personal accounts receivables. The transfer between two users involving virtual currency will also be processed if the risk control system recognizes the risk. Wechat also said that wechat payment does not support virtual currency transactions. If any behavior of using wechat payment for virtual currency transactions is found, it will be refunded.

Recently, some virtual currency buyers in the southern coastal areas found their bank accounts frozen. Xiao SA said that these blocked accounts are likely to trade in some small exchanges with “intentional or unintentional laxity” in real name authentication of identity information. The front hand of the transaction is suspected of money laundering, corruption and bribery or other illegal crimes, and the funds flow into the back hand’s bank account. In order to investigate the case, the back hand’s bank account is frozen.

Beijing News reporter Zhang Shuxin

Responsible editor: CT

Leave a Reply

Your email address will not be published. Required fields are marked *