Recently, there has been a significant event in the cryptocurrency sector: the former OKX boss Xu Mingxing publicly stated that there will be a review of fund situations and the return of borrowed funds used for trading cryptocurrencies. I received this information two months ago. Today, when Xu Mingxing posted, it further confirmed my intelligence. In the future, no one will be able to borrow for cryptocurrency trading; domestic exchanges will strictly check Chinese users to prevent capital outflow. This is because Sun Yuchen had dinner with Trump, drawing the attention of the higher-ups, who are worried about capital outflow, especially since many are going bankrupt due to cryptocurrency loans.
Who is Xu Mingxing? Heartless and ruthless, a top-level schemer. CTO Sun Zhongying embezzled millions, and he ruthlessly sent an entire department to prison. In addition, in 2014, a trader was caught after taking hundreds of thousands from OKX and was sentenced to several years. He cannot tolerate anyone profiting. Over the years, he has accumulated a fortune worth hundreds of billions by running exchanges. The largest source of income for exchanges comes from contract players, many of whom trade cryptocurrencies with borrowed money. Xu Mingxing would love for you to take out loans for trading; this way, he continues to profit. His public statements on this issue clearly indicate this is not decided by him. In the future, domestic exchanges will have to review funds, and with Sun Yuchen closely related to the Trump family, previously cooperating with Trump on currency issuance, he became a global focus. Plus, Sun Yuchen is Chinese, and many high-ranking officials domestically noticed him and the cryptocurrency sector, so they plan to further regulate the cryptocurrency sector.
Personally, I think this domestic policy is very good; such measures should have been implemented long ago. Most people trading contracts in the cryptocurrency sector are heavily in debt and at risk of bankruptcy. Exchanges exploit traders without remorse. The higher-ups controlling exchanges to review user funds also indirectly protects ordinary citizens from losing money, reducing debt for some and preventing bank loan funds from flowing into the cryptocurrency sector. This is a win-win situation.
Why is it that only OKX is facing such issues right now? At the end of 2020, Xu Mingxing was detained by the national security police in Shanxi. He has already turned OKX into a state-owned entity, and Xu Mingxing himself admitted that OKX could be donated to the state at any time. Therefore, OKX has always had a deep political background. Among domestic exchanges, OKX has the strongest ties, and other exchanges will likely follow suit in controlling Chinese users.
All exchanges can obtain information about their country's residents from their governments. Exchanges must cooperate with the government to hold compliant licenses; this is the case in any country. This is a rule, and oftentimes exchanges need to cooperate, for example, with government departments fighting money laundering, which requires OTC information provided by exchanges.
Binance is the same; Binance also has information on Chinese relatives. They were reported by Bloomberg to have internal employees labeled as PEP, meaning politically exposed persons. Therefore, many exchanges will gradually conduct capital reviews.
People who don't know are criticizing OKX and Xu Mingxing. Xu Mingxing would love for you to go gamble. He would love for you to take out loans so that when you go bankrupt, he makes a fortune. Xu Mingxing is not a fool; he speaks very cautiously from his position. As a casino owner, he says he wants to review client loan funds—doesn't that obviously invite criticism? This shows that Xu Mingxing also doesn't want this; the current policy is just like this.
The intelligence I have come across in the cryptocurrency sector is top-tier. I have been a leading figure in this market for five years. I can argue directly with the old version of exchanges; I have no need to fear them. I am different from those KOLs; I don't need to kiss the feet of exchanges. As a top-tier figure, I have dealt with various people in the hundreds of millions, even billions, who have been politically persecuted in China.
In March, the UAE invested $2 billion in Binance. On February 1, I was discussing this with friends, telling them that Binance would soon receive investment from the UAE. By the end of May, my friend informed me that Sun Yuchen appeared at a Trump dinner, and high-ranking officials in China became concerned about capital outflows, aiming to protect the assets of the Chinese people and prevent them from being exploited by exchanges, thus avoiding bankruptcy. Therefore, they decided to review funds. In July, Xu Mingxing publicly addressed this issue; the information from Liangxi indicated that they were aware of domestic trends before the old version of the exchange.
Capital review is a good thing, which shows that the country also values the safety of people's property, avoiding everyone going bankrupt from loans. I am quite supportive of this approach; I don't think anything is wrong. Everyone should prepare psychologically this year, as many exchanges will conduct capital reviews, returning borrowed funds used for trading cryptocurrencies. Doesn't this mean bad news? Bulls need to be careful in the second half of the year.
