A number of OTC traders have entered the central bank's disciplinary list, and bank risk control efforts have been strengthened
This year is a year for the Central Bank of China to crack down on money laundering. Due to the inability of the renminbi-cryptocurrency to comply, OTC merchants that walk on the edge have been targeted. Many OTC companies have stopped doing business, and the industry is bleak.
Wu said blockchain only learned that recently, many OTC merchants stopped non-counter transactions for all bank cards under their personal status because they were on the central bank's “punishment list,” and “they are not allowed to open a non-counter card for 5 years, and they are not allowed to open a non-counter counter for 3 years.”
This means that in addition to facing traditional public security system investigations and card freezing, banks and central banks around the world have also begun active supervision, and the latter's crackdown continues to increase.
The logic of what happened was:
Because the central bank of China cracked down on money laundering this year, it mainly delegated responsibilities and obligations to major banks and financial institutions. Under such circumstances, bank anti-money laundering monitoring has become very strict, and any account opening needs to go through the anti-money laundering system.
Rumor has it that a local bank has even directly stopped all card processing operations in order to crack down on money laundering. Wu said that blockchain has also revealed that China Merchants Bank has been the hardest hit, with card freezing in the coin industry (6): China Merchants Bank “insanely” blocked credit cards of many people in the coin industry, and a large number of credit cards were directly frozen.
In this case, because mainstream banks have large amounts of user data and transaction data, they will be more sensitive to identify money laundering, virtual currency transactions, etc. when identified through artificial intelligence and other algorithms, so the probability of mainstream banks freezing cards is higher.
People familiar with the matter revealed that the specific process is that after the bank's own system has alerted and restricted transactions, it will be reported to local central banks. After review, the central bank will issue a corresponding punishment list, and finally, similar penalties such as “not being able to open a card for 5 years, not being able to open a private cabinet for 3 years” as described above appear.
On September 18, the Guangxi Public Security Bureau and the Nanning Central Branch of the People's Bank of China announced the first batch of 1091 people trading bank accounts, requiring that the punished individuals be suspended from all bank account operations other than counter transactions, payment account operations, and not to open new accounts for 5 years. Also announced at the same time were places such as Quanzhou, Putian, Wenzhou, and Laibin.
As a place with many pyramid scheme cases in Guangxi, an OTC dealer from Nanning suspected of assisting telecom fraud criminals to launder money was investigated and caught by the police on May 20.
Although some OTC companies have entered the punishment list, the current public information focuses more on “new criminal cases involving organizations and individuals suspected of trading accounts, impersonation, and telecommunications networks.” However, in OTC cryptocurrency transactions, this kind of behavior also often occurs. Some merchants that engage in RMB OTC require employees to use personal bank cards to conduct transactions.
The largest OTC platformHuobiOn the other hand, a wave of PR has recently been carried out. The information conveyed to the outside world is that normal cryptocurrency transactions are not illegal; they can only be frozen if they involve black money or black production, and statedHuobiA great deal of technical prevention and control has already been carried out on this.
However, in reality, since there are no corresponding rules and regulations, financial institutions have different criteria for judging cryptocurrency transactions. Strict ones, such as CMB, cryptocurrency transactions have always been part of anti-money laundering. In 2018, the Hong Kong branch of China Merchants Bank issued an announcement: According to relevant requirements, if China Merchants Bank Hong Kong Branch discovers that a transaction involves virtual currency in a customer account, the use of the account may be terminated.
Industry sources pointed out that judging from the current situation, it is not just about black money that is frozen; the act of trading cryptocurrencies itself may also trigger banks' risk control mechanisms. However, the latter is relatively manageable for individuals, and there are fewer complete freezes; for OTC merchants, they have to use someone else's account, but this may be investigated and punished again, or even put on a “black list.”
Risk Alerts
According to the “Risk Reminder on Preventing Illegal Fund-raising in the Name of “Virtual Currency” and “Blockchain” issued by five departments including the Banking Insurance Regulatory Commission, everyone is requested to establish a correct investment philosophy. The content of this article does not endorse the promotion of any business or investment activities, and investors are invited to raise awareness of risk prevention.
Source: Wu Says Blockchain Real
