Beware of virtual currency and blockchain scams, and don’t let illegal fund-raising take advantage of it.

　　In order to implement Socialism with Chinese characteristics Thought of the Supreme Leader in the New Era and the spirit of the 19th National Congress of the Communist Party of China, and further promote the protection of consumers’ rights and interests in banking and insurance industry, according to the unified arrangements of China Banking and Insurance Regulatory Commission, China, from March 11th to March 15th, Beijing Banking and Insurance Regulatory Bureau organized Beijing banking and insurance industry to carry out the "March 15th" consumer education publicity week, by printing unified posters, compiling typical cases and risk tips, shooting video clips, micro movies and other forms, and effectively improving consumers’ financial products.

　　■ Brief introduction of the case

　　Zhang, a foreigner, together with Zhao, Li and others, set up a network technology company overseas, specializing in promoting virtual currency in China. Zhang et al. declared that the "so-and-so currency" they operated was the second generation encrypted electronic currency after Bitcoin, which had great appreciation space. It was also claimed that it was used for internal settlement of enterprise groups and bookkeeping among members in a well-known international financial group and its top ten Internet industries. The digital currency could circulate and increase its value rapidly, which could make investors "get rich overnight". Later, Zhang and others continued to develop offline and absorb funds by pulling people’s heads and grading commissions, involving hundreds of people and involving more than 10 billion yuan. Later, Zhang and others were arrested by the police and were criminally punished for the crime of pyramid selling and illegal absorption of public deposits.

　　■ Case analysis

　　The soaring bitcoin makes people full of illusions about digital currency, but in fact, there are only a few digital currency with real application value based on blockchain technology. Recently, under the banner of "financial innovation" and "blockchain", some lawless elements have absorbed funds by issuing so-called "virtual currency" and "digital assets". This kind of activity is not really based on blockchain technology, but the reality of speculating on the concept of blockchain for illegal fund-raising, pyramid selling and fraud. Such illegal fund-raising has the following characteristics:

　　First, the degree of networking is high. Relying on the Internet and chat tools to conduct transactions, and using online payment tools to collect and pay funds, the risks spread widely and spread quickly. Second, cross-border is obvious. Many lawless elements build websites by renting overseas servers, which actually carry out activities for domestic residents and remotely control the implementation of illegal activities. Third, it is deceptive, seductive and concealed. It is confusing to make use of the hot concept to speculate and fabricate various theories of "being tall".

　　■ Risk warning

　　In order to protect your own property and stay away from illegal fund-raising, Beijing Banking Insurance Regulatory Bureau reminds you:

　　First, look at the blockchain rationally, and don’t blindly believe in the promise of hype. Judging from the current technological development, it is still difficult for digital currency to fully play the role of a real currency. The above-mentioned "financial innovation" with "blockchain" and "virtual currency" as gimmicks is actually a Ponzi scheme of "borrowing the new and returning the old", and its capital operation is difficult to maintain for a long time. Consumers should keep their eyes open, see through the traps behind these "financial innovations", and don’t blindly believe in the extravagant promises, so as not to make their own property suffer losses.

　　The second is to establish a correct investment concept. Investment is often accompanied by risks, and high returns are bound to bear high risks. Consumers should establish a correct investment concept, do not believe in the myth of "getting rich overnight", pay attention to learning financial and investment-related knowledge, objectively evaluate their risk tolerance, choose formal investment channels, and realize the goal of maintaining and increasing their wealth.