THELOGICALINDIAN - A assistant at Chinas Renmin University has offered his estimation of why the regulators are shutting bottomward Chinese bitcoin exchanges He categorical seven key reasons
Also read: China’s Regulatory Crackdown Forces More Bitcoin Exchange Closures
Professor Yang Dong is Deputy Dean of Renmin University’s Law School and Director of Renmin’s Centre for Fintech and Internet Security. He has announced at abounding workshops that were able-bodied abounding by regulators such as the Bank of China and the China Securities Regulatory Commission, as able-bodied as bookish researchers, anticipate tanks and lawyers.
In an account on CCTV, he offered a alternation of explanations why the regulators are closing bottomward Chinese bitcoin exchanges, China Finance Online appear on Friday.
Lack of Licensing
The aboriginal point he fabricated apropos licensing. He said that banking institutions are appropriate to access licenses to backpack out business such as by the China Banking Regulatory Commission and the China Insurance Regulatory Commission (CIRC). However, he acclaimed that:
The Nature of Bitcoin
His additional point was apropos the attributes of bitcoin itself. “The apparatus of attached the bulk of encrypted money by specific cipher is controversial,” Professor Yang claimed, citation how a “new encryption arrangement may be invented, the absolute algorithm can additionally be tampered with, the arising of encrypted money may additionally increase.”
In addition, he acicular to bitcoin’s aerial amount volatility. According to the professor, agenda currencies abridgement “a bright amount base.” He explained that “because there are no bread-and-butter fundamentals to appraise the accumulation and appeal of bitcoins and built-in value, the bazaar abstract atmosphere after-effects in aciculate fluctuations in prices.” Investors afterward the trend blindly could ache cogent losses, he added.
Moreover, he said cryptocurrencies are “not afflicted by the active force of aggrandizement and the barter amount aberration as able-bodied as added issues.”
Money Laundering & Pyramid Schemes
The professor’s third point focused on how agenda bill affairs can be acclimated for money bed-making and banking fraud, as able-bodied as to abstain adopted barter controls. According to him:
He again followed up with his abutting point, advertence that some pyramid schemes and counterfeit activities advantage agenda currencies.
Market Manipulation & Security Concerns
Professor Yang’s fifth point apropos bazaar manipulation. Anyone advance tens of millions of dollars will be able to calmly dispense the price, sending it skyrocketing, he explained. Any losses are anesthetized assimilate accustomed investors with beneath advice and a disadvantaged position, he detailed.
His sixth point involves aegis risks. “Data accident and advice aegis risks are intertwined,” he elaborated. If the aegis arrangement is not able enough, hackers can admission bitcoins which will advance to a ample bulk of abstracts accident at the bitcoin barter and irreparable damage, he added.
Darknet Transactions
The Professor’s final point was about bitcoin actuality acclimated in darknet markets, which accept not been finer regulated, he declared afore abacus that:
What do you anticipate of Professor Yang’s explanations of why Chinese bitcoin exchanges are actuality shut down? Let us apperceive in the comments area below.
Images address of Shutterstock and China Finance Online
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