A recent report released by the People's Bank of China has attracted widespread attention, pointing out that the phenomenon of overseas exchanges providing services for domestic illegal activities is becoming increasingly serious. At the same time, the report also clearly pointed out that virtual currency does not have the legal status of legal tender, lacks legal protection, and cannot be used as a legal means of payment. These contents will undoubtedly have a profound impact on the virtual currency market and trigger people's thinking about future development.

In the current context of globalization, overseas exchanges often provide services for domestic illegal activities. Behind this phenomenon, there are often financial risks and legal loopholes, which pose a considerable challenge to the domestic financial order. The report of the People's Bank of China once again sounded the alarm, calling for strengthening regulatory cooperation and jointly maintaining financial security.

As an emerging financial instrument, virtual currency has attracted much attention in recent years. However, the report of the People's Bank of China clearly pointed out that virtual currency does not have the legal status of legal tender, let alone legal protection, and cannot be used as a legal means of payment. This assertion has triggered discussions and concerns about virtual currency from all walks of life. In this case, the legitimacy and development prospects of virtual currency are questionable.

The report of the People's Bank of China has sounded the alarm for people, reminding them to be vigilant against the possible risks of virtual currency. Although the virtual currency market was once prosperous, the ambiguity of its legal status has become an important factor restricting its development. As an investor, treat virtual currency rationally and avoid blindly following the trend to avoid unnecessary losses.

In the information age, financial innovation and development are unstoppable. However, innovation and compliance are not mutually exclusive. The report of the People's Bank of China reminds us that financial innovation must be carried out within the legal framework and cannot cross the bottom line. Only in a healthy and standardized financial environment can virtual currency play its due role and inject new impetus into economic development.

Overall, the report of the People's Bank of China is of great significance. It not only reveals the current situation of overseas exchanges providing services for domestic illegal activities, but also warns of the legal risks of virtual currency. Faced with this reality, we need to strengthen regulatory cooperation, regulate market order, and ensure the stability of the financial system. Only in this way can we welcome the opportunities brought by financial innovation and jointly create a new situation for financial development.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Coin Circle (120BTC.COM) News: The People's Bank of China issued a "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" on its official website at 5 pm today, pointing out that recently, virtual currency trading speculation activities have risen, disrupting the economic and financial order, breeding gambling, illegal fundraising, fraud, pyramid schemes, money laundering and other illegal and criminal activities, and seriously endangering the property safety of the people.

The notice defines the essential attributes of virtual currency and related business activities as follows:

(I) Virtual currency does not have the same legal status as legal currency: Bitcoin, Ethereum, Tether and other virtual currencies have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed accounts or similar technologies, and existing in digital form. They are not legal tender and should not and cannot be circulated and used as currency in the market.

(II) Virtual currency-related business activities are illegal financial activities: virtual currency-to-virtual currency exchange business, virtual currency exchange business, virtual currency trading as a central counterparty, information intermediary and pricing services for virtual currency transactions, token issuance financing, virtual currency derivatives transactions and other virtual currency-related business activities are suspected of illegal issuance of token tickets, unauthorized public issuance of securities, illegal futures business, illegal fundraising and other illegal financial activities, which are strictly prohibited and resolutely banned in accordance with the law. Those who conduct related illegal financial activities that constitute a crime shall be investigated for criminal responsibility in accordance with the law.

(III) Providing services to Chinese residents through the Internet from abroad is also an illegal financial activity: domestic staff of relevant overseas virtual currency exchanges, as well as legal persons, non-legal organizations and natural persons who knowingly or should have known that they are engaged in virtual currency-related businesses and still provide them with marketing, payment settlement, technical support and other services, shall be investigated for relevant responsibilities in accordance with the law.

(IV) There are legal risks in participating in virtual currency investment and trading activities: Any legal person, non-legal person organization or natural person who invests in virtual currency and related derivatives and violates public order and good morals shall have the relevant civil legal acts invalid and shall bear the losses caused by them; if they are suspected of disrupting financial order and endangering financial security, they shall be investigated and dealt with by relevant departments in accordance with the law.

The notice pointed out that a sound working mechanism will be established to deal with the risks of virtual currency trading speculation, as well as a multi-dimensional and multi-level risk prevention and disposal system, and organizational implementation will be strengthened.

The notice also requires that financial institutions and non-bank payment institutions shall not provide services for virtual currency-related business activities, financial institutions and non-bank payment institutions shall not provide account opening, fund transfer and clearing and settlement services for virtual currency-related business activities, shall not include virtual currency in the scope of collateral, shall not carry out insurance business related to virtual currency or include virtual currency in the scope of insurance liability, and shall promptly report any clues of illegal and irregular problems to relevant departments.

Regulation of virtual currency mining activities

In addition, China's National Development and Reform Commission and other departments issued a notice on the regulation of virtual currency mining activities, requiring all regions, departments and relevant enterprises to attach great importance to and fully understand the necessity and importance of regulating virtual currency mining activities, comprehensively regulate virtual currency mining activities, and ensure that practical results are achieved.

The notice pointed out that it will strengthen the dual control of energy consumption of new virtual currency mining projects, list virtual currency mining activities as eliminated industries, strictly prohibit virtual currency mining activities in the name of data centers, strictly restrict the electricity application and energy use of virtual currency mining enterprises, strictly prohibit the provision of financial and tax support for new virtual currency mining projects, and prohibit virtual currency mining projects from participating in the electricity market. All financial and tax support and financial services for virtual currency mining projects will be stopped.

Cryptocurrency market plummets across the board

Affected by the relevant news, the cryptocurrency market plummeted across the board. Tradingview data showed that after the announcement, Bitcoin plummeted from around $45,000 to $42,180, with the largest drop of more than 7%, to $42,447 before press time; Ethereum plummeted by more than 8%, falling below the $3,000 mark, hitting $2,833, and was reported at $2,871 before press time.