The United States sanctions Chinese Bitcoin OTC traders: the game and challenges of financial technology

In the wave of global financial technology, the trading of Bitcoin and its derivatives has received increasing attention and supervision from governments of various countries. Recently, the United States sanctioned two Chinese Bitcoin OTC (over-the-counter) exchangers, which has attracted widespread attention from the international community. As an important form of cryptocurrency trading, OTC trading is favored for its confidentiality and flexibility, but it has also become the focus of supervision by various countries. This article will explore in depth the background, impact and implications of the US sanctions for the future development of financial technology.

Bitcoin OTC traders play a vital role in the cryptocurrency market. Unlike traditional exchanges, OTC traders provide a private trading method that allows buyers and sellers to trade directly without an open market. This method reduces the transparency of transactions to a certain extent and increases the difficulty of supervision. The US sanctions against Chinese OTC traders are actually a response to the potential risks of this market.

First, we need to understand the background of the sanctions. In recent years, with the popularity of cryptocurrencies such as Bitcoin, governments have gradually increased their supervision of them. The US government has begun to strictly review cryptocurrency transactions for the purpose of maintaining national security, combating money laundering and preventing capital outflows. In this context, the sanctions against Chinese OTC traders can be seen as a tough measure taken by the United States against its fintech competitors.

According to a statement from the U.S. Treasury Department, the two sanctioned traders are suspected of helping Chinese companies circumvent U.S. sanctions and conduct cross-border fund transfers. This behavior not only touches the bottom line of U.S. law, but also challenges the international financial order. It can be said that the U.S. sanctions are not only aimed at individuals or companies, but also a warning to the entire cryptocurrency market. This incident occurred at a time when the global economy is facing uncertainty and countries are paying more and more attention to financial security.

Secondly, the impact of this incident on the global cryptocurrency market cannot be underestimated. First, at the psychological level of investors, the news of sanctions will undoubtedly cause market anxiety and panic. Investors may have doubts about the future trend of Bitcoin and other cryptocurrencies, which will in turn affect the liquidity and price volatility of the market. In addition, the increase in regulatory pressure may also cause some traders to choose to exit the market, further exacerbating market turmoil.

On the other hand, the U.S. sanctions may also prompt other countries to strengthen their own cryptocurrency regulation. For example, the Chinese government may take this opportunity to speed up the introduction of relevant policies in terms of strengthening supervision of cryptocurrency transactions. Such policy changes will not only affect the domestic investment environment, but may also have a profound impact on the international market. It is foreseeable that the cryptocurrency market will become more complex in the future, and the game between countries will become more obvious.

In this context, financial technology companies need to re-examine their compliance strategies. With the changes in the regulatory environment, companies must fully consider legal risks when conducting cross-border transactions. The role played by OTC dealers in this process is particularly important. They need to find a balance between protecting customer privacy and complying with laws and regulations. Many OTC dealers have begun to take measures, such as increasing the construction of compliance teams and strengthening communication with regulators, to cope with the increasingly severe regulatory environment.

In addition, technological advances have also provided new solutions for OTC dealers. With the development of blockchain technology, decentralized trading platforms have gradually emerged. These platforms can reduce the participation of intermediaries while ensuring transaction security through smart contracts, thereby reducing transaction costs and risks. In the future, OTC dealers may use these new technologies to improve their compliance capabilities and market competitiveness.

Of course, we cannot ignore the impact of this incident on investors. As the cryptocurrency market gradually matures, investors' risk awareness is also increasing. In the face of market fluctuations, rational investment has become a more important choice. Investors need to pay more attention to the fundamentals and policy trends of the market, rather than just chasing short-term price fluctuations. Through reasonable asset allocation and risk control, investors can better cope with market uncertainties.

When thinking deeply about this incident, we should also pay attention to the future development trend of the cryptocurrency market. Although the current regulatory environment is full of challenges, in the long run, cryptocurrency, as an important part of financial technology, still has great development potential. More and more companies and institutions are beginning to accept cryptocurrency as a payment method, and the application scenarios of blockchain technology are also expanding. All of these provide broad space for the future development of cryptocurrency.

Finally, in the face of the challenges and opportunities of global financial technology, governments, companies and investors need to respond actively. By strengthening international cooperation and information sharing, we can jointly promote the healthy development of the cryptocurrency market. As the essence of financial technology reflects, innovation and compliance are not contradictory. Only under the framework of compliance can innovation truly realize its value.

In summary, the US sanctions on Chinese Bitcoin OTC traders are both a reflection of the current financial technology environment and a warning for future market development. Against the backdrop of increasing global economic uncertainty, how to find a balance between compliance and innovation will become a common challenge faced by all parties. Only through in-depth thinking and active response can we be invincible in this game of financial technology.

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

The latest news is that the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced on Monday that two Chinese citizens were sanctioned for helping the North Korean Lazarus hacker team launder money. The two Chinese citizens operated a Bitcoin over-the-counter (OTC) exchange business, helping customers convert Bitcoin into legal currency.

The Chinese citizens sanctioned this time are Tian Yinyin from Nanjing, Jiangsu, and Li Jiadong from Anshan, Liaoning. The U.S. Treasury Department announced that Tian and Li received more than $91 million worth of cryptocurrency from North Korean hackers. According to the announcement, the money was stolen in an attack in April 2018, and hackers stole a total of $250 million worth of cryptocurrency.

The announcement stated that Tian Yinyin transferred $34 million worth of illegal funds through a RMB bank account associated with his Bitcoin address, and also transferred nearly $1.4 million worth of Bitcoin to prepaid Apple iTunes gift cards to buy Bitcoin.

The announcement did not specify which exchange was stolen. Bixin believes that the stolen exchange in the announcement may be Coincheck, Japan's largest exchange, which is one of the security incidents with the largest amount of damaged assets in 2018.

The U.S. Treasury Department also published the two people's online names and 20 Bitcoin addresses held by the two on its sanctions list.

According to Bixin, the two Chinese citizens are OTC merchants on multiple exchanges. At present, Li Jiadong's OTC account on localbitcoin has been deactivated, and the WeChat account bound to the mobile phone number in Anshan, Liaoning has also been cancelled. Tian Yinyin's OTC account on CoinCola is still trading.

Due to the sanctions, these Chinese citizens' property rights in the United States will be frozen and they will be prohibited from trading with Americans or in the United States. In addition, the financial institutions they provide assistance to may also face sanctions from the U.S. Treasury Department.

Lazarus Group
Named after Lazarus, the resurrected from the dead in the Bible, the hacker group developed malware such as WannaCry and is notorious in the cybersecurity community. On September 13, 2019, the U.S. Treasury Department identified it as an agency under the North Korean government. According to a United Nations report, North Korea stole $571 million worth of cryptocurrency in 2019. This income was invested by the North Korean regime in its ballistic missile and nuclear programs.

Japanese and South Korean exchanges and miners are the main victims of North Korean hacker attacks. According to reports, Coincheck, Bithumb, Youbit, Coinlink, Nicehash and other companies have been attacked by North Korean hackers, and most of these stolen currencies have flowed into Chinese exchanges through OTC.