The China Internet Finance Association (NIFA) published a warning article pointing on cryptocurrency exchanges that operate on servers outside China. It emphasizes on the forbiddance of crypto trading and related activities. The rule that was signed in 2017 and forbidden any action related to virtual currency and ICO.
The regulating association points on crypto exchanges that move their operation outside china and use the servers overseas to continue trading and transaction activities. The article continues by talking about the marketing activities of exchanges that focus on recent fluctuation in the global financial market. NIFA believes this marketing stuff is not real, and cryptocurrencies can not be considered as alternatives for gold, silver, and other traditional assets.
NIFA claims that crypto exchanges use fraudulent activity to attract and engage users in the ecosystem. It says the prosperity that some users feel by trading in crypto exchanges is made by trading platforms and not real.
“By sampling and analyzing the transaction data of some platforms, the daily turnover rate of more than 40 virtual currencies exceeds 100%, and the daily turnover rate of more than 70 days exceeds 50%,” the article claims.
The leading regulator association of China in internet-based financial markets continues to accuse crypto trading platforms in the recent article. It says that exchanges “encroach on consumer property” by malicious operating procedures. Besides, incidents like downtimes and asset freezes are considered as malicious activities of exchanges.
NIFA’s article asserts that oversea activity of crypto exchanges is a way for them to hide. The association believes that exchanges change their domain names and server addresses frequently to run away from regulators.
“Office locations and business development areas are often different, consumers are often unable to determine the identity of the operator, and it is difficult to recover property losses once they occur,” continues the article.
At the end of the article, NIFA focuses again on the forbiddance of virtual currency trading and related activities. It asks users to raise awareness about the risks of financial activity in the virtual currency ecosystem.