Why did the Ministry of Public Security seal Bitcoin (Why does the country rectify Bitcoin)?

Why did the Ministry of Public Security seal Bitcoin? Recently, why did the Ministry of Public Security seal Bitcoin? At a press conference on August 24, 2017, “Wu Xiaobo, Chief Engineer of the Ministry of Public Security and Deputy Director of the Intelligence Command Center, said: “More than 20,000 people have been found to have obtained and used Bitcoin through the Internet nationwide. But if we look at it from the perspective of criminal principles (including theft, etc.), it is difficult to trace back to the end of 2013.”

“This indicates that the country has extremely strict requirements for cracking down on Bitcoin transactions,” he said. “This is because they believe that blockchain technology itself is a decentralized Cyber space, and cryptocurrencies are virtual assets in the network.”

Wu revealed that the police have recently issued warnings to some investors: because some criminals illegally issue token tickets, they will use these funds for illegal mining activities. Once significant economic losses occur or they are arrested or detained, it will directly lead to confiscation of assets or even criminal detention, implicating charges of organizing and leading pyramid selling activities. (“Science and Technology Innovation Board Daily”)

Why does the country rectify Bitcoin?

Editor’s note: This article is from Interlink Pulse (ID: HiveEcon), written by Yuan Shang, authorized by Odaily Planet Daily for reproduction.

Recently, the National Development and Reform Commission and six other departments jointly held a meeting to study and introduce the “Notice on Preventing Bitcoin Risks,” which explicitly stated the need to strengthen the monitoring and disposal of virtual currency trading platforms, ICO projects, and various types of digital assets. The “Notice” stated: “For any form of illegal business activities or unauthorized financial businesses, relevant departments shall adopt measures to suspend or terminate relevant activities in accordance with laws and regulations.” Under these policy constraints, regulatory agencies do not allow illegal criminal activities under the name of “trading in coins”. Therefore, the “Notice” requires relevant competent authorities to establish an Internet information sharing mechanism to provide necessary technical support for Internet security management, and at the same time, strongly crack down on information collection and use behaviors that collect user account data through various means. “Key aspects of the rectification include cleaning up advertising propaganda” and “closing down proxy companies”, and emphasizes that further efforts will be made to increase investment and talent cultivation in the field of blockchain, continuously promoting China to be in the forefront of the digital economy industry layout this year.” This is not only a problem of the central level’s rectification of virtual currency, but also one of the positive measures taken by various countries to deal with encrypted currencies in the future. Why did this happen so quickly? First, to prevent illegal fund-raising fraud using anonymity technology. Second, to use virtual currency as a tool for money laundering. Third, to prevent criminal activities using cryptography. Fourth, for some people, methods of hiding the source of funds have already been used for illegal activities such as darknet drug sales and money laundering, but there are also many problems that need to be solved. For example, how to prevent Bitcoin from stealing or misappropriating property from the pockets of ordinary people is still not fully understood. In addition, Bitcoin itself is not a new thing. The main logic behind it is that it is a new means of production, a new circulation system, and a commodity with a certain level of anonymity and scarcity. Fifth, without the endorsement of a third party, it is difficult to ensure whether the legal and compliant issuer can accurately evaluate market prices and obtain corresponding benefits. Sixth, Bitcoin purchased from other channels is not a real and effective value store, but can be used for payment settlement purposes. If someone sends him Bitcoin and cannot exchange it for cash, then he can only sell the Bitcoin, leaving only a Bitcoin address for sale. Although many investors now know the benefits of this operation, in fact, many people still think it is just a scam. In fact, the reason why this situation occurs is because many people involved in Bitcoin mining are trying to earn high profits rather than directly investing in Bitcoin transactions. Therefore, the government should encourage those who have the ability to explore the future development direction of Bitcoin.