Ever felt curious how Chinese trade cryptocurrency when exchanges are closed? Last Saturday November 11, China’s Central Television (CCTV-13) aired a program about bitcoin over the counter trading in the country.
OTC Bitcoin Commercials Clustering Wechat Groups
The program reveals that advertisements about cryptocurrency OTC trading have been clustering WeChat groups like a virus over the past month. The channel’s news reporter also interviews early bitcoin adopter Wang who demonstrates how easy it is to trade through OTC.
“It’s as simple as sending an email,” says Wang. He teaches the reporter to download a bitcoin wallet and sends her some bitcoin by scanning her QR code. Wang continues to demonstrate how to trade at OTC platforms like Localbitcoins.com.
No KYC Requirement Leaves Room for Illegal Transfer of Assets
According to CCTV’s broadcast, many Chinese cryptocurrency OTC platforms don’t ask for any KYC data. Users don’t have to register on some platforms to buy and sell with Wechat pay or Alipay, which leaves room for criminal activity.
“Bitcoin OTC trading is likely to serve as an underground bank for transfer of assets,” notes Yang Tao, assistant to the president of Institute of Finance and Banking of the Chinese Academy of Social Sciences.
National Committee of Experts on the Internet Financial Security of Technology of China, a government-backed research group, told CCTV that BTC and CNY OTC trading pairs have increased from 5 percent to 20 percent at two major international platforms since the Chinese shut down crypto exchanges.
The Committee warns that bitcoin and altcoins lack inherent value and that their speculative nature could attract and mislead naive newcomers to the space.
Why Must Cryptocurrency Trading Services Be Regulated in China?
These so-called virtual coins are not currencies. They don’t have legal tender status to be used as means of payment and unit of account in China based on current laws we have. And they should not be circulated in the country
That’s what Li Dongrong, president of National Internet Finance Association of China, had to say on the matter. He adds that evidences has shown that anonymous crypto trading provides a convenient tool for money laundering and smuggling. At present, renminbi is the sole legal tender currency in China.
421 Forms of Scam Coins Around the World
In closing, CCTV quotes Secretary General of the Committee Wu Zhen in saying that they have inspected over 421 scam coins globally that have no technical advantages to support a sustainable development.
Do you think China will take action to curb cryptocurrency OTC trading? Let us know in the comments below.
Images courtesy of Shutterstock, and CCTV-13
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