Brothers, Shanghai has busted a major illegal currency exchange operation using USDT, 6.5 billion! At first glance, doesn’t it feel like ‘oh no, we’re done for’? Don’t panic, let Old Zhao explain to you; this incident might cause a bit of noise in the short term for us in the crypto space, but in the long run, it’s definitely good news! Why? Because regulation is cleaning up the field!

1. Short-term pain, OTC is stricter: Once this news breaks, those gray currency exchange OTC merchants will definitely tighten up for a while, or their fees will be higher and more hidden. Want to exchange some foreign currency privately with USDT? The risks are higher, and the costs are also greater; if you're not careful, you might really get caught. So, in the short term, let’s play it safe, stay away from those unclear OTCs, find reliable channels, or simply avoid such operations. The situation is tense, keeping a low profile is not a bad thing.
2. Here comes the key point! The crackdown is on the illegal, not on USDT itself! Do you see it clearly? Shanghai is cracking down on illegal currency exchange, using USDT for illegal activities (bypassing foreign exchange controls). The official hammer is targeting underground banks, not USDT as a tool! This distinction is huge! What does this indicate? It indicates that the regulatory authorities are very clear: tools are innocent; it depends on how you use them. If you use USDT for illegal activities, they will catch you without discussion; but if you use USDT for compliant activities, like trading on licensed exchanges in Hong Kong in the future, that might be allowed.
3. The biggest good news: Accelerating the entry of legitimate players! Brothers, this is the key! While we are cracking down on illegal activities here, the US just issued ID cards for stablecoins! Hong Kong is also about to issue stablecoin licenses! This signal is so damn clear: global big shots are rushing to register stablecoins and set rules! Why? Because this thing is too useful, cross-border payments and settlements have huge future potential!
4. The good days of USDT being the only player may be numbered! This incident involves illegal currency exchange using USDT; although Tether may claim innocence, with this negative news swirling, plus the new US legislation requiring 100% reserves, monthly audits, and algorithmic stablecoins facing the death penalty, how much longer can USDT continue its black box operations? Personally, I feel that compliance requirements are getting stricter, and more transparent and obedient options like USDC present new opportunities! In the future, everyone using stablecoins might prefer those that are licensed and backed by established entities.
5. What opportunities are there for ordinary people?
Don't touch the gray industry! Isn't the lesson of 6.5 billion in the news enough? It's not worth it to risk yourself for a bit of transaction fees or convenience! Compliance is the bottom line!
Focus on the legitimate player track! Who will receive the Hong Kong license? Under the US GENIUS Act, which stablecoin will comply the fastest? When these news come out, related concepts like licensed exchanges, compliant stablecoins, and even Layer 2 public chains providing services for them are likely to surge! Doing homework in advance and preparing is better than anything else.
Layer 2 public chains may be the big winners! Why? The more stablecoins are used and comply with regulations, the higher the demands on the underlying network (fast, cheap, stable). Layer 2 solutions for ETH (like Arbitrum, Optimism) as well as fast networks like Solana will see explosive demand! The value of their underlying tokens, such as $ETH and $SOL , will rise accordingly.
Old Zhao summarizes:
This matter in Shanghai targets the bad guys, not the cryptocurrency space! Don't scare yourself.
Regulation is not the enemy; it's here to set rules! Without rules, this market will always be wild and cannot grow big. With rules in place, legitimate players (big institutions, big capital) will dare to come in and the market can grow larger! Just think about the $20 trillion market forecast!
Opportunities lie in 'compliance' and 'infrastructure'! Keep an eye on who gets the Hong Kong license, watch the progress of compliant stablecoins in the US, and prepare for related exchange concepts and public chain tokens. This wave of regulatory storm sweeps away the dirty stuff, leaving only real gold and silver!
So, brothers, when you see this kind of news, don’t just be scared. Understand the trend behind it—everyone globally is rushing to set rules and issue licenses for stablecoins, and that’s the biggest good news signal! Prepare in advance for the compliant track and wait for the legitimate players to take off! What do you think? Let’s chat in the comments!
The market never lacks opportunities; what it lacks is the determination to see the direction clearly amidst the turmoil.
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