In recent years, the so-called virtual currencies, including Bitcoin, Litecoin, and various forms of tokens, have been traded in a centralized manner on several internet platforms. As such trading attracts more participants, related financial and social risks have reached to a level that cannot be ignored. In order to help the public correctly know about virtual currencies such as Bitcoin, discern investment risks, and protect their own rights and interests, here are cautions as follows:
The prices of virtual currencies are highly volatile because they lack explicit value foundation and are prone to market speculation. Investors who blindly follow market speculation on virtual currencies are highly likely to lose their investments. Therefore, investors need to enhance their awareness of risks. It is also worth noting that virtual currencies are used frequently as tools in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising. Investors should stay vigilant and report any clue of illegal activities to the authority immediately.
Investors who engage in speculations on virtual currency through trading platforms are susceptible to risks related to significant price volatility and security issues. These risks are further accompanied by technical risks of the platforms. Several cases of hacking and theft targeted at trading platforms across the world already served as examples. Investors should bear such risks themselves. In addition, virtual currency trading platforms are increasingly used by criminals to conduct illegal activities, leading to significant legal risks. In recent days, regulatory authorities have suspended the operation of all trading entities engaged in ICO (Initial Coin Offering) activities. So there is no legal basis for platforms which engage in the trading of various forms of virtual currencies.
National Internet Finance Association (NIFA) hereby calls on all member institutions to fulfill their commitment to industry self-regulation, abide by national laws and regulations, refrain from participating in or providing services for centralized trading of virtual currencies, and voluntarily resist illegal financial activities.
This article originally appeared in NIFA’s Official Blog and was translated by Pandaily.
Click here to read the original Chinese article.