China does not have a policy prohibiting the purchase and sale of virtual currencies, and virtual currency transactions are legal in our country. 1) Directly state that USDT is a virtual currency and is not protected by Chinese laws. The first article of the "Notice" clearly classifies Tether, that is, USDT, into the category of virtual currency. It also states that virtual currency is not legal and should not and cannot be used as currency in the market.
(2) Providing "pricing services" for virtual currencies is also illegal and will be banned in the future. Article 2 of the "Notice" stipulates: "Virtual currency-related business activities are illegal financial activities. Carry out legal currency and virtual currency exchange business, exchange business between virtual currencies, act as a central counterparty to buy and sell virtual currencies, and provide information for virtual currency transactions. Intermediary and pricing services, token issuance financing, and virtual currency derivatives trading and other virtual currency-related business activities suspected of illegal sales of tokens, unauthorized public issuance of securities, illegal futures business, illegal fund-raising and other illegal financial activities are strictly prohibited. Resolutely ban it in accordance with the law." It can be seen that even providing "pricing services" for virtual currencies is considered an illegal act, and thus carries corresponding legal risks.
(3) The "information intermediary" model of virtual currency trading has come to an end, is no longer gray, and has been classified as illegal. Similar to "pricing services", the "Notice" also clearly identifies the provision of information intermediary services as an illegal financial activity, confirming its illegality.
(4) Domestic personnel of overseas exchanges cannot evade legal liability. The "Notice" not only determines that the provision of services by overseas virtual currency exchanges to residents in my country through the Internet is also an illegal financial activity, but also stipulates that domestic staff of relevant overseas virtual currency exchanges should be held accountable in accordance with the law.
(5) Contracts involving virtual currency investment transactions are invalid on the grounds that they violate public order and good customs. The "Notice" points out that there are legal risks involved in participating in virtual currency investment and trading activities, because once the activity violates public order and good customs, according to the provisions of Article 153, paragraph 2, of the "Civil Code", the civil legal act will be invalid and the losses will be borne by oneself.
(6) The concept of encrypted assets will become a "sensitive vocabulary" and will be focused on in this round of regulations. Article 11 of the "Notice" stipulates that "the market supervision department shall strengthen the registration management of market entities. The registered names and business scopes of enterprises and individual industrial and commercial households shall not contain the words 'virtual currency', 'virtual assets', 'cryptocurrency', 'encrypted assets', etc." Or content.” It can be seen that terms such as crypto assets have become “sensitive words” for regulatory agencies.
(7) Focus on cracking down on crimes, from the previous crimes of organizing and leading pyramid schemes to crimes of illegal business operations and fraud. Compared with the crime of organizing and leading pyramid schemes, the "Notice" identifies related virtual currency transactions as illegal financial activities, so its focus is gradually shifting to illegal operations, financial fraud and other criminal activities. This shows that the types of virtual currency industries and businesses that will be attacked in the future will change. Based on this, Sister Sa believes that the DeFi business may become the target of public criticism.