What is cryptocurrency trading (Is cryptocurrency trading illegal and what legal responsibilities come with it)

What is cryptocurrency trading? How does cryptocurrency trading work as an investment tool? In traditional financial industries, stocks, bonds, or futures contracts are commonly traded by investors. Therefore, when the market trends upward, people also participate in trading to gain profits, which is a common practice. But what if this characteristic is absent? Many people believe that blockchain technology can solve certain issues, such as bitcoin theft. So how do we determine whether it is necessary to exploit these vulnerabilities to avoid risks? Let’s take a look at the characteristics of digital currencies: fast transaction speed, security, stability, and affordability; the ability to reduce volatility, minimize speculative activities, improve capital utilization efficiency, and mitigate losses; the presence of leverage and the ability to hedge economic uncertainties. (Tencent News)

Is cryptocurrency trading illegal and what legal responsibilities come with it

Cryptocurrency is considered a new type of financial product. It is not only a virtual commodity but also carries high investment risks, similar to traditional investment tools. Due to the significant fluctuations in prices of encrypted assets like bitcoin and their speculative nature, many investors seek alternatives for purchasing or selling at lower prices. Therefore, cryptocurrency trading is a good choice for some individuals. However, many people do not recognize whether this project is legitimate or compliant.

So, is cryptocurrency trading illegal? If we consider it as a legal attribute of a financial product, what does it entail? This needs to be considered from a legal perspective.

1. Currently, our country does not explicitly prohibit the trading or transfer of any tokens. National regulations allow buying, selling, and transferring various securities and derivatives as well as other “digital currencies”, such as ICO issuance, fund management company issuance; ICO (Initial Coin Offering); futures exchange issuance, etc. (Renmin University of China)