There is nothing new under the sun; all of history is repeating itself according to certain laws.
2013 - 2014: Initial Understanding Phase
2013 (Notice on Preventing Bitcoin Risks)
At that time, Bitcoin, as an emerging virtual currency, was rapidly gaining popularity worldwide. In response to the potential money laundering risks it posed, the People's Bank of China and five other ministries issued a notice. This document classified Bitcoin as a specific virtual commodity that does not possess the same legal status as currency. It also stipulated that financial institutions and payment institutions must not engage in businesses related to Bitcoin, while reminding the public to invest rationally and prevent risks. This notice marked the beginning of the state's attention to Bitcoin and its potential risks; however, due to a lack of detailed legal basis and regulatory measures, enforcement was limited.
2014 (Notice on Preventing Token Issuance Financing Risks)
With the popularization of Bitcoin and other virtual currencies, the new financing method of ICO has emerged. To prevent financial risks and fraudulent behavior, the central bank issued an announcement to regulate the market. The announcement reiterates the commodity nature of Bitcoin and other virtual currencies, explicitly stating that token issuance financing is a form of disguised financing, which carries significant financial risks and fraud hazards, leading to a complete halt to all token issuance financing activities. This further indicates the state's regulatory stance on virtual currencies, although trading and circulation of virtual currencies have not been completely eradicated.
2017: Strict Control Phase
(Notice on Preventing Token Issuance Financing Risks) (September 4, 2017)
The ICO market is booming, with a large influx of investors, leading to frequent market irregularities and drawing significant attention from regulatory authorities. This announcement once again emphasizes the commodity nature of virtual currencies, strictly prohibiting any organization or individual from illegally engaging in token issuance and financing activities. Issued tokens must be withdrawn, and efforts to combat illegal activities have been intensified. This is the famous 'September 4th Ban', marking the state's strict control phase over the virtual currency market, effectively curbing the overheating of the ICO market.
2021: Comprehensive Crackdown Phase
(Notice on Further Preventing and Handling Risks of Virtual Currency Trading Speculation) (September 2021)
In recent years, the speculative activities in virtual currency trading have rebounded, with some criminals using it for cross-border money laundering and financial fraud, severely threatening national financial security. This document, jointly issued by the People's Bank of China and ten other departments, clearly states the need for a comprehensive crackdown on illegal financial activities related to virtual currencies, including services provided by foreign virtual currency exchanges to domestic residents, illegal fundraising, market manipulation, and other illegal acts. At the same time, monitoring and early warning of speculative trading in virtual currencies will be strengthened, establishing a collaborative mechanism among multiple departments. This represents a significant upgrade in the state's regulation of virtual currencies, demonstrating a firm commitment to maintaining financial market stability and social security.
Future Outlook: Continuing to Strengthen Regulation
When channel agents were thriving in sales, they were once labeled as speculators.
When the pandemic lockdown ends, what happens to those who were once imprisoned for endangering public safety?
When cross-border e-commerce is labeled as smuggling.
You should know that the pace of market changes and technological advancements far outstrips the improvement of laws and regulations.
Therefore, high risk and high profit coexist.
