The global crypto assets and trading market has ushered in a new period of liquidity active in recent months. As the leading currency of crypto assets, Bitcoin has broken through a historical high.

The global crypto assets and trading market has ushered in a new period of liquidity active in recent months. As the leading currency of crypto assets, Bitcoin has broken through a historical high. The Bitcoin trading price on the Coinbase exchange once reached the historical highest price of US$19,873.23 per coin, and the price of Bitcoin broke through the US$20,000 mark is just around the corner.

market sentiment is extremely optimistic. A larger range of arbitrage institutions and traditional trading people have entered the crypto field, allowing derivative products and tools led by contract trading to gain more room for value utilization. It also makes contract trading products in the cryptocurrency market an indispensable role in the trading system. It is in such an environment that many gray profit methods for trading products with contracts have always spread in this market where supervision and compliance are absent.

According to Link Dede, the existing cryptocurrency derivatives exchanges are mainly divided into three categories, namely, exchanges mainly based on futures , option single products; or both products; or physical delivery.

However, there will always be illegal operations and disrupt market order in the market development. Dede Think Tank spent several months to conduct in-depth tracking and analysis of contracts and derivatives trading platforms in the cryptocurrency market, and completed the "Broken Gray Contract Trading Platform" The "Top Ten" Hidden Profit Techniques" are intended to expose the current market chaos and warn investors.

Uncovered the bottom of the gray contract trading platform "Top Ten" hidden profit-making methods

On March 22, 2020, the official WeChat account of the People's Bank of China issued a post, revealing the current virtual currency exchange that has severe brushing volume, malicious downtime, and money laundering. Three major crimes.” This immediately triggered "exchange rights protection incidents" including a large number of mainstream trading platforms. This type of rights protection targets the "three major crimes" of the exchange listed by the central bank, warning the exchanges of irregular behavior.

Dede think tank tracks and studies the common routines of current virtual currency spot, contract and derivative trading platforms, and summarizes the black sickle technique of the exchange into the following ten types according to its nature:

1. uses "Customer Loss Position " to grab it Interest

2. arbitrarily modify the K-line and mislead investment

3. interferes with market liquidity blackmail

4. unauthorized misappropriation of user funds

5. online false project html l2

6. needle, malicious liquidation, server delay, downtime

7. collude with the project party of the funding disk model

8. false transactions, the exchange "sweeps" to attract users to enter

9. risk-free protection, induce users to conduct high leverage trading

10. small contract exchange , fire one shot and change another

This article aims to reveal the details of these gray sickle techniques to warn investors.

Gray means 1. Use "customer loss position" to gain profit

In the capital trading market, the so-called "customer loss position" refers to "the amount of customer loss", and "drink customer loss" means using customer loss to make profits. This phenomenon is common in traditional stock and foreign exchange markets. It is an illegal means of making profits by trading platforms and agents using their dominance over customers to make customers lose investment.

To understand this "gray profit" method, first of all, understand where the money lost in the investment goes. As an example, stocks are virtual capital with floating prices, and the total price does not exactly correspond to real capital. From a macro perspective, the market value of the stock market is weighted by all stocks based on the recent transaction price. The so-called "evaporation" means that the transaction price falls, causing a decline in the total value of virtual capital. Simply put, in the capital market such as stocks, what you make does not necessarily mean the money you lose from others, but comes from changes in the value of the stock market.

can undergo major changes in the digital crypto asset trading field where regulation is empty and mixed, and users' counterparty trading may undergo major changes.On many contract trading platforms, the counterparties that investors and users match through the platform are not the trading objects that the system best matches in the entire effective market depth, but are "bankmakers" who "be both referees and athletes" one by one. . Some of the "bankers" here are platform-related traders, some are platform-related agencies, and some are even trading platforms themselves hide in the background to play "makeup".

trading platform and agents join forces to "set an ambush"

The so-called "drunk" means that the trading platform and agents join forces to make bets with customers. In essence, customers do not trade with the market, but with trading platforms and agents. Without regulatory intervention, under the backend data, trading tools and game mechanisms fully controlled by the platform, investors and customers engage in betting games with them in contracts, leverage and other derivatives trading. The tragic result can be imagined.

is in the field of digital currency investment, and there are many trading platforms that use similar means to make profits. An insider who has been engaged in crypto asset investment for many years told Liande App that on the list of CoinMarketCap (CMC), a well-known crypto asset data platform in the industry, crypto exchanges ranked among the top 100 in trading volume, especially contract trading platforms. , at least half are using this method to make gray profits.

The person familiar with the matter said that more well-known exchanges such as Manco, XMEX, and 58coin also have "drunk customers".

digital currency exchange and contract exchanges are the main method of "drinking customers": first use agents to attract customers, and when taking advantage of the great asymmetry of information, change the nominal matchmaking transaction to substantial customers and exchanges Between the times. Enable "Pin" (large-value transactions occurring in a certain direction in a very short time, and the K-line is displayed as a longer upper or lower shadow), "fixed point explosion" (using severe market fluctuations to make a certain All contract trading users are closed), "server fluctuations" (maliciously cut off the service response of online trading tools, actively causing customers to fail to close positions in time, add margin and other technical operations), and even "modify the K-line" (displayed to the client The market data is modified to mislead investors) and other means to expand customer losses and make profits from it.

Specifically, if the user trades on a regular exchange, the exchange will match the seller and buyer. The matchmaking transaction refers to the seller entrusting sales orders in the trading market and the buyer entrusting purchase orders in the trading market. The trading market determines the transaction price of both parties based on the principle of price priority and time priority, and generates an electronic transaction contract, and performs physical items according to the delivery warehouse designated by the delivery order. Delivery transaction method.

often has "AB position" in the exchange. Pocket A is A book, which means direct access to the upper primary market and conducting matchmaking transactions; Pocket B is B book, which refers to betting with customers. This is an objective need. When the market liquidity is insufficient, the efficiency of matching transactions is very low. At this time, the trading platform needs to use the B position to eat to provide liquidity for the market. In large exchanges, market makers often replace the role of B position. In the "drinks loss" exchange, the proportion of A positions is very small, and even all of them are B positions.

Once the customer funds enter the B position, the exchange will become the customer's counterpart. All losses that occur will be converted into profits of the exchange. Therefore, using its unequal position with customers in information and resources, expanding customer losses has become a profitable means for some exchanges. This asymmetry is also reflected in control of funds. In addition to common methods such as pin insertion, active order explosion, and modification of K-lines, users who want to escape will also be intercepted by "server fluctuations cannot withdraw cash".

In the virtual currency investment market, choosing large and credible exchanges has almost become a "beginner's idea", but why do these "customer loss" exchanges still exist? In addition to the speculative greed attribute that investors cannot control, it is related to the inducing mechanism of agents to "make the fire".

Agent Trap

A contract trading investor who did not want to be named told the Liande App that he purchased a digital currency exchange in December 2019 with the recommendation of a "stock trader" A large amount of digital currency has been imported.The "trader" told him, "As long as you invest money in the digital currency market and operate completely according to his instructions, if you don't make 200% in a month, you are incompetent and you can withdraw cash at any time."

A week later, he The principal of 200,000 yuan was lost by half. He told Liandede App: "Later, I lost more than half of my money and wanted to stop the loss, but the platform kept failing to pass the review and said that the server was downtime and delayed." The investor also suspected that the "teacher" was "calling against the order". He reminded his group members to be careful of this "trader". Therefore, the other party quickly found him and compensated him for some of the losses.

After contacting multiple parties, a proxy service to Manbi Exchange, Shangqian told Liandede App that these so-called "traders" and "teachers" are all agents of the exchange. Agents of large exchanges will allocate the handling fees for user transactions proportionally with the exchange, which can improve the liquidity of platform matching while acquiring customers. But unlike ordinary agents, "customer loss agents" not only provide new users for the exchange, but also use the means of "shouting fake orders" and "shouting counter-order orders" to make customers lose money, and these losses are caused by the agent and the transaction The platform is distributed proportionally. The way of sharing customer losses and handling fees at the same time is called "packing positions" or "position packaging".

Chengqian took Manco Exchange as an example to reveal to Liandede App that Mancoin has about 50 agents, and half of them will reach a customer loss sharing agreement with the exchange. Full currency will generally give the agent a share of 50%-70%, and the large agents will have more, reaching 80%-90%. On some social platforms, exchanges even publicly recruit agents. These agents are often analysts and community leaders who have stronger customer leadership capabilities and therefore also receive a higher share of the exchange.

Huang Yihua was once a user of Manbi Exchange. He told Liandede App about his experience. He met a "selling teacher" in a WeChat group called "Stocking Teacher", and under the recommendation of the "teacher", he bought digital currency on Manbi. After losing money, he was asked to continue adding warehouse.

Even as a community of interests, the agency and the exchange were not always a monolithic one. Some small exchanges even disappear and run away with the agency's income. "Cutting agent leeks" is also the reason why the exchange emphasizes "packing agents to settle daily and withdraw coins at any time" when recruiting agents.

Ordinary customers can only swallow their anger

Link Dede also contacted Su Juan, a long-term "shouting orders", who briefly summarized some of his experience in the industry. Calling a order is a very knowledgeable skill. They will establish a "user portrait" for customers and roughly judge the customer's understanding of investment, digital currency, futures trading and other fields. Before "calling orders", they will ask customers to provide 12 recent transaction records and screenshots of positions, and will also read customers' circle of friends to formulate strategies.

Su Juan further explained that when calling orders, you should always appease the customer's emotions and expand their trading frequency and transaction volume as much as possible: "If you lose, tell him that these losses are nothing, and you can make it back next time you trade; if you make a profit, you will Tell him that if you just invested 10 times the amount of money, you are now financially free."

Under the joint offensive of such an intermediary and platform, ordinary customers have almost no ability to resist in the trap of exchanges and agents. But there are exceptions: a small number of persistent customers will ask for compensation, and will try to report the case, form a rights protection group, and raise banners downstairs of the company. For these customers, agents are often willing to lose money and eliminate disasters and compensate them for most of their losses in order to maintain their "customer source". However, most customers are already accustomed to the huge risks of investing in virtual currencies and cannot afford the high cost of rights protection, so they often choose to swallow their anger.

Gray means 2. Arbitrarily change the K-line and mislead investment

Some exchanges will use the control of user accounts and trading data to modify some data, thereby misleading investment.This situation is particularly common in small exchanges. Due to insufficient trading depth, the market conditions of these exchanges often experience explosive rises or falls. Therefore, the exchanges will actively modify the market data to flexibly avoid or reduce bets The losses that the Chinese platform may or is unwilling to bear.

Around 7:30 on April 2, 2020, Bitcoin ushered in a wave of rise. According to 58Coin's global site, the BTC perpetual contract rose directly from US$6,598 to US$7,284. At that time, Huobi Global Station and OKEx both quoted around US$6,770. An investor who traded on the 58Coin platform later stated on the investor rights protection platform that he set a closing price of $7,200, although the K-line at the time showed that the highest price exceeded $7,200 (it should be closed at $7,200). ) but his account was forced to close the position at $6,680, losing a large amount of expected profits. Soon, as evidence to reach the user's closing price - the K-line that indicates that the "mysterious" of US$7284.42 disappeared. In other words, this disappeared K-line can no longer prove that the price has reached the user's set value.

For trading platforms, if this K-line with the highest price of $7284 still exists, then using this as evidence, the "extra profit" lost by investors due to forced closing of positions at low prices in advance will need the exchange itself to Make up.

htmlOn the afternoon of April 2, the investor questioned the platform on the online customer service. The customer service of 58Coin Exchange responded: "The K-line was repaired" to facilitate users to watch the market, and "only the line that plugs the pin is modified."

Photo/Investors' screenshots before and after the K-line publicly disclosed on social media and customer service responded to

8Coin's official subsequent announcement, saying that no user had lost their positions because of this, and admitted that the fact that the K-line was modified was changed, but his behavior of modifying the K-line was just that The explanation is to facilitate users to watch the disk. Now, this official announcement is nowhere to be found.

In order to avoid the losses caused by "pin insertion", 58Coin forcibly erased the abnormal K-line, which shows that some exchanges can make profits by modifying market data, which is the next sickle method to be mentioned: pin insertion.

gray means 3: pinning, malicious liquidation, server delay, downtime,

pin is actually what was mentioned above. The exchange quickly raises the price and then falls back, or falls rapidly and then rebounds, which is reflected in the K-line. "Needle". The "needle" on the

chart/K line

price discovery, as one of the main functions of futures, carries the functions of price hedging stability and price prediction. The formation of stock index futures prices has a complete, open, clear and highly regulated system. It combines important information such as stock spot market prices, trading volume, various factors affecting the spot market, as well as traders' expectations of factors affecting the spot market price and investors' psychology and behavior, together with the price trends, position volume, and transactions of the futures market. It is formed by combining factors such as quantity. It is impossible to be completely out of touch with the spot price of the stock index.

But at present, most exchanges use their respective contract trading indexes, and the contract delivery price formation mechanism is opaque, providing the possibility of firing a needle. Instability in the trading system is also a common way to harvest.

Such trading performance is usually: when the market fluctuates sharply, due to the unstable or unprofessional trading system, the system is stuck or downtime, and even locking the account, investors are unable to adjust their futures positions, which makes them explode The warehouse causes property damage.

According to the news from Hulian Pulse, the earliest futures exchange in China, 796, was once well-known for futures, but because of "the trading rules are not perfect and the technical structure is too simple, it is impossible to perform major surgery on the exchange, so it can only be repaired in part." This led to people using rules to manipulate the market, and eventually it could only end up with a shutdown.

Although technology is developing, major exchanges still have short-term downtime in the extreme market conditions.

In March this year, the 8th issue of the 315 Financial Consumer Rights Protection issue "Don't be deceived by virtual currency trading platforms" also stated that some trading platforms forced leveraged transactions to "explode positions" through malicious downtime and manipulate the market. A large virtual currency trading platform suffered system downtime of 6 times within a year, three of which were sudden failures of unknown reasons.

Gray means 4. By interfering with market liquidity blackmail items

Virtual currency investment market transactions basically continue the traditional secondary market transaction model. Traders quote to the exchange, and only the exchange matches the transaction, securities companies and exchanges. I will not make a transaction directly as a counterparty. The exception is liquidity providers, , New York Stock Exchange, , is called specialist, and is called "market maker" in China.

Take the New York Stock Exchange as an example. Most stocks on the main board have a Specialist responsible for monitoring, stabilizing the market and providing liquidity. The people in blue that we often have in the news about the NYSE are them. Simply put, they do trade matchmaking for traders: when there are insufficient traders in the market, when traders try to sell stocks, they buy at a reasonable price and sell when someone buys them. Most of this is now replaced by ECN (automatic matching transaction mode). This not only provides short-term liquidity, but also prevents panic selling caused by large-scale price spreads or dry liquidity. The experts on the exchange also gained the additional advantage provided by the exchange: the transaction fee is 0, and the entire liquidity can be seen.

is more important in the virtual currency investment market where there are many types of transactions but low transaction depth. For small exchanges and projects, low liquidity caused by insufficient trading volume may even make it difficult for exchanges to operate normally, so market makers are a necessary means. They are often directly employed by the project, providing liquidity for the project tokens on various exchanges and improving the trading experience for investors.

is also because of its direct employment by the project that market makers have become the "harvest" targets for some exchanges. In traditional stock markets and large digital currency exchanges, market makers and exchanges are mutually beneficial symbiotic relationships, so exchanges will provide market makers with additional advantages to reduce their operating costs. But when market makers are employed by projects, this mutually beneficial situation will be broken: projects require market makers to provide liquidity, but to the overall exchange, market makers of individual projects do not help much in market liquidity. "Harvest" market makers will not only not affect the overall situation of the exchange, but also the harvested market makers and projects will not choose to part ways with the exchange at huge costs.

How to "routine" projects and market makers on exchanges

A senior liquidity provider told Liande App that the main method of exchanges to "harvest" market makers is to use dominant interference without handling fees and transaction delays Market makers trade, "suck blood" from the pool of funds used by market makers for trading.

Specifically, the basic operation of a market maker is to insert a purchase order and a sale order between the sell and the buy order at the market. If both the inserted orders are traded, the market maker will get the sale The price difference between orders. If the transaction cannot be completed for the time being, the market maker will take two orders by itself. After the entire process, the positions held by market makers did not change. If the price difference between the buy and sell orders (also known as the market gap) still has a surplus after deducting various transaction fees, the market maker will obtain corresponding profits.

The exchange that attempts to "harvest" market makers will take the initiative to eat lower-priced sell orders and sell at a higher buy unit price. In order to maintain liquidity, the market maker will take the exchange's sell orders while paying the spread and handling fees. In this cycle, the market maker chamber is always in a loss state.

A market maker close to the Bitmax exchange told Liandede App that Bitmax will even actively control the market maker account to "self-transaction" without the market maker and exchange, and empty the business through the above method The trading bottom position of the market merchant.

After this, Bitmax will also take the initiative to propose to the project party that the exchange will provide liquidity for the project tokens instead of its market maker team, but will pay thousands of dollars in "transaction costs" every month. In the view of this market maker, this is no different from "protection fees".

Gray means 5. Unauthorized misappropriation of user funds

means the exchange employee or the exchange itself, and the user funds can be misappropriated without permission.

On March 8, 2018, the Japan Financial Agency (FSA) announced that it would impose administrative penalties on several digital currency exchanges. Bit Station was ordered to close business for one month for rectification because it lacked proper procedures to protect customer assets, and was asked to submit a rectification plan before March 22 because employees were found to have misappropriated customer funds without authorization. Five exchanges including Coincheck, Tech Bureau, GMO Coin, Bicrements and Mr. Exchange were ordered to rectify.

On January 18, 2019, the Incheon Western Police Department of South Korea revealed that a user of a virtual currency exchange headquartered in , Incheon West District, Incheon City sued former representative directors and other relevant personnel in the name of fraud. According to the complaints from the exchange user, the exchange does not return the deposit previously deposited by the user in the exchange. There are 60 victims confirmed, and the overall loss is at least tens of billions of won. Police are collecting evidence to investigate and summon the user who submitted the indictment and the person in charge of the exchange.

On December 25, 2019, the cryptocurrency exchange BitGoGo issued an announcement stating that the Bitgogo Exchange issued an announcement stating that it temporarily put some user digital assets (including BTC, ETH, EOS, LTC, BCH, BSV, ETC and USDT) for 180 days and The annualized 20% income will be frozen and financial management will be carried out. All of the above digital assets will be frozen and financial management will be started at 00:00 on December 25, 2019. The exchange will unlock the frozen assets and repay the financial management income at 180 days.

Gray means 6. Online fake projects

Some exchanges will achieve the purpose of "cutting leeks" by launching inferior and even fake projects. After investigation, Liandede App found that there are many such projects on the market, and even a complete industrial chain has evolved. The more typical project is the Indian project SPOKKZ, which is invested by NGC, community communication for PGS, and transactions in MXC.

SPOKKZ is a blockchain project launched by Indian streaming service Spuul. It aims to introduce blockchain technology into streaming services and distribute its token Spokkz to the audience as a reward for community interaction, which can use these tokens to purchase paid content , including subscribing to Bollywood movies, TV series, translated subtitles, drama reviews, etc., it was launched on the Matcha Exchange in December last year.

海新冠彩国冠彩国 in March this year and found that the project had deceived investors, breached contracts many times, and lost contact with the person in charge. In the first list of bad projects of the "Pinocchio Plan" released by Kubi International in April, SPOKKZ also became the first to be on the list of project defaults.

In a March survey, Liandede found that in order to list coins for free on the Matcha Exchange, SPOKKZ changed the coin issuance rules without notifying investors and locked the tokens of private equity investors six times moon.

How capital, community and exchanges join forces with

A person familiar with the matter told Liandede App that SPOKKZ's arbitrary change of the coin issuance rules was instructed by its main investor NGC Ventures. He said that the progress of the SPOKKZ project was actually close to a shutdown before it was launched on the secondary exchange in December 2019. According to an investor who participated in Spokkz in 2018, the project party has stopped reporting the development progress of investors since 2019, and has refused to make a statement on the grounds of vacation during the 15-month public offering period. Investor communication, no one cares about social accounts, and no one in the telegram community answers investors' questions.

In December 2019, SPOKKZ went online on the Matcha Exchange, and then walked out a strange curve: within one month of entering the secondary market, Spokkz market fell all the way, falling to US$0.068 on January 15, a drop of 73%. On January 27, Spokkz became abnormal again, rising 78% in a single day. On February 1, Spokkz market began to follow Bitcoin again, maintaining 0.00002660 BTC for a month and a half, with a fluctuation even less than 1%.After a plunge, Spokkz market began to follow the US dollar, maintaining US$0.04 for a month and a half, with a volatility of less than 1%. The only possible reason for this strange market in

is the exchange and capital operations. Investors involved in SPOKKZ's early stage investment told Liande App that NGC Ventures is SPOKKZ's largest early stage investor. You can also see that in the consultant column, NGC founding partner Roger Lim is listed. The investor once said that he would join hands with Spokkz's major investment institution NGC to solve the default of SPOKKZ through legal means, but NGC did not comment.

An insider close to NGC Ventures told Liande App that the main driving force behind SPOKKZ's default on launch is NGC, and NGC will certainly not sue SPOKKZ for breach of contract. He said NGC promised SPOKKZ that it could trade its tokens on the Matcha Exchange for free. NGC will jointly promote, pull up and reduce its holdings with the Matcha Exchange, and 30% of the final profit will belong to the project party.

In December 2019, SPOKKZ began to promote the community of the model coin project PGS and airdropped candy in the community. With two dives, the price of SPOKKZ project token SPKZ at the end of July was about US$0.018, less than 7% of the issue price.

is a very small number of such projects in the exchange. In addition to SPOKKZ, VID, XanPool, and MultiVAC are also products of similar techniques. It is not difficult to find that the above four projects have many common points: NGC led the investment, traded on the Matcha Exchange, and promoted in the PGS community.

is not difficult to summarize that in this type of harvesting method, there are three roles: investor, exchange and community. Investors are responsible for finding and contacting overseas inferior projects similar to SPOKKZ, the exchange is responsible for pulling out and reducing holdings, and the community is responsible for project promotion.

Gray means 7. Conspiring with the funding model project party to scam

Dede think tank once refines the basic rules of pyramid scheme coins in the "List of 100 pyramid scheme coins in the first half of 2018" as follows:

. The pyramid scheme leader registered and established a shell company at home or abroad or abroad It also sets up websites, which usually establishes charity, financial management, games, medical research, etc. to establish initial public trust.

. Through WeChat, QQ groups, lectures and other forms, it is vigorously promoted the value of a certain "virtual currency". Some even use special public relations to clean up the Internet to dispel members' concerns.

. Using the "high rebate" with a profit of up to 100 times as a gimmick, it attracts many people to participate. The business model is usually "pay entry fee", "hit people", and "forming a hierarchical team to calculate compensation", and constantly attracts members. The membership fee achieves the purpose of making money, the specific form is:

) Pay or disguised entry fee, that is, you can only get the "qualification" to make up for remuneration or develop the downline after paying the money;

) directly or indirectly develop the downline, that is, to attract people Join and form a hierarchy in a certain order;

) will be reimbursed from the sales performance of direct or indirect development, or reimbursed or rebates based on the number of people who develop directly or indirectly.

. In the end, the project often occurs because there is no offline connection. The project members are unable to exchange digital tokens for cash and the capital chain is broken.

From 2019 to the present, the capital market has begun to enter the cryptocurrency industry, and is active in major exchanges with various gameplay. The most representative of

is the PlusToken wallet. Public information shows that the number of people involved in the PlusToken funding project alone is as high as 3 million, and the funds involved are as high as 20 billion yuan.

Another extremely active in the exchange is V-Dimension Resonance Coin (VDS). VDS rose from the initial 2 yuan to the highest point of 80 yuan in two months in 2019, an increase of 4,000%.

The first exchange to rise by harvesting this wave of traffic is MXC, known as the "Matcha Exchange". In February 2019, Matcha issued an announcement stating that the MXC Innovation Zone will launch the "Resonance Coin" VDS without fear of the VDS funding attributes, and the one that blatantly promotes VDS is the Matcha Exchange. It is also because of VDS that the Matcha Exchange is in the limelight for a period of time in 2019.

Gray means 8. False transactions, the exchange "brushes" to attract users to enter

In March 2019, Bitwise pointed out in the report submitted to the SEC that the "brushes" behavior of the Bitcoin market was serious, and the real trading volume in the entire market was about the report. With 4.5% of the trading volume, only 10 exchanges can report real trading volume. This report is the first time that a research institution has published a study on "brush volume" through public channels, and market participants are shocked by this result.

In April of the same year, BTI released the "Market Supervision Report" of the cryptocurrency exchange, showing that 17 top 25 exchanges in CoinMarketCap have a fake trading volume of 99% and the top 50 exchanges ranked in the adjusted trading volume. There are 35 fake transactions with more than 99.5%.

chart/USDT accounts for 67.3% of the false trading volume. Source: BTI

html In July, Alameda Research, a market liquidity and over-the-counter trading provider, released relevant research reports and continued to publish real trading volume monitoring data. The results show that as of September 25, 2019, 66.4% of the transaction volume in the cryptocurrency market were false transactions.

htmlIn October, TokenInsight released the "Real Exchange Trading Volume Report (Part 1)" in October, showing that among the 30 mainstream exchanges, 36% of the exchanges (11) have a real trading volume ratio of more than 80%; nearly 50% of the transactions The real transaction volume ratio of the (14 companies) is less than half. It is worth noting that the real trading volume of more than 25% (8) of exchanges accounts for less than 20% of their reported trading volume.

gray means 9. Risk-free guarantee, induce users to trade highly leveraged

Currently, major monthly exchanges and "contract" businesses meet the prominent characteristics of futures, from trading logic to operating procedures: high leverage, margin, forced flattening warehouses, weekly and monthly quarterly delivery periods, standardized contracts, platform centralized trading, hedging function promotion, etc.

. Futures itself is a high-risk investment and does not belong to the general investment and financial management method. In traditional financial markets, futures investment will be relatively strict for traders to review, but there are basically no operating thresholds in the cryptocurrency market. Some exchanges even focus on contracts and vigorously promote contract trading.

TokenInsight data shows that in the third quarter of 2020, the trading volume of the digital asset derivatives market was $2.7 trillion, a month-on-month increase of 25.1% over the previous quarter and a year-on-year increase of 159.4% over the third quarter of 2020. The trading volume of the entire spot market in fell by about 26.5% month-on-month compared with the previous quarter and a year-on-year decrease of 12.2% compared with the third quarter of 2019. Among these transactions, most of them are 10-20 times large leverage, and some exchanges will even provide 100 times huge leverage, which is unimaginable in the traditional financial derivatives market.

A senior former exchange practitioner told Liande App that since the high leverage digital currency contract market is still in a period of exploration, various rules are still imperfect, individual investors do not have the corresponding level of cognition and Risk tolerance and control ability. Under the combined effect of these major premises, it is immoral to promote the so-called "contract" to ordinary individuals. For these investors, high leverage is actually no different from gambling. They are easily confused by the professionalism of contracts, and they unknowingly regard contracts as gambling, causing irreversible consequences.

gray means 10. Small contract exchanges, after the rise of

contract exchanges, a new type of fraud model appeared in the market. That is, the fraud gang plans behind the scenes, organizes domestic publicity teams to attract new shares of their exchanges through profit sharing, positions and commissions. The newly launched only small exchanges without any technical and financial strength, and wait for the " "In the harvest period, fraud gangs will continue to build and promote new exchanges to commit fraud.

The nature of a false exchange is similar to online fraud. Scammers will organize teams to deceive investors into various communication groups. At the same time, the group is equipped with "instructors" and other salesmen pretending to be. The scammer gang cooperates with each other to guide investors to the false Open an account and trade on the platform. The exchange is actually a fake website with no trading function, and even the K-line and trading information are false information.

On October 8, 2018, according to the "Jiangsu Public News" column, Jiangning girl Xiao Deng was cheated of 2.7 million yuan on the false Bitcoin platform she recommended because she believed in the words of her "online love boyfriend" and owed more than 60,000 US dollars. . It is reported that on September 28, the Nanjing Jiangning police successfully destroyed a large cross-provincial online fraud gang and arrested more than 70 people involved in the case. A total of more than 100 computers, more than 80 mobile phones, more than 30 virtual dialers, and multiple fake K-line charts of Bitcoin were seized on the spot.

On April 20, 2020, Taiyuan police received a report on January 14 that from December 2019 to January 2020, the victim Li "invested" on a false Bitcoin platform and was defrauded of 1.263 million yuan. After investigation, the criminal gang was founded in early October 2019. Within three months, it committed fraud against domestic victims, with nearly 100 million yuan in funds involved. Local police in Taiyuan recently cracked a major transnational telecommunications network fraud case and arrested 35 criminal suspects. The funds involved in the case are nearly 100 million yuan.

A source told Liandede that a team once contacted him to cooperate in promoting a perpetual contract exchange and should try their best to attract users in the currency circle. Stock investors should not, saying that it is unbearable for losses.

At the same time, the team also told it that the team will change its name every year. It was previously called Zealscoin, and now it operates in the market under the name of Bitfirst. It also means that there are hundreds of such exchanges in the country.

Lawyer explains the law: How do investors who have been infringed use legal weapons to protect their rights?

chain law team lawyer Guo Yatao told Liandede that according to domestic laws, if the investor losses are caused by the platform system, the trading platform should theoretically bear the responsibility under the premise of sufficient evidence, and this responsibility is also the responsibility of this kind. It should be "full compensation liability", rather than the so-called "proportional compensation". After all, the trading platform provides trading services, and what it earns is also the user's trading service fees. The trading platform has a clear source of obligations and is obliged to ensure users' smooth and safe transactions.

chain method believes that user rights protection incidents caused by downtime in the currency circle, “dragging the network cable” and other problems are very difficult for users. Just want to pull the trading platform into legal procedures, Facing the "two mountains":

, "ghost subject", that is, the operating subject of the trading platform is difficult to determine.

Take FCoin as an example. The so-called "communityization" makes it impossible for it to even have the actual operating entity behind a website. If it were not for Zhang Jian's own belief, a series of evidence would even be needed to "penetrate the veil of community-based operations" to position the specific one. The subject of responsibility.

In addition, seeing the major trading platforms prosper in China, who are the main body, where are the teams working, and who are the persons in charge, it is obvious that everyone knows, but when a dispute arises, users cannot be in the domestic courts. In accordance with domestic laws, sue the corresponding domestic entities, whether it is Lekuda, Huobi Tianxia or Bochen. For users, let alone positioning the above entities as specific responsible entities, even if they strive for a " The opportunity to go to court is only one word, it is difficult.

Second, "Judgment Barrier".

Nowadays, the User Agreement is no longer simply arbitration jurisdiction, but rather to bring jurisdiction abroad, such as Seychelles , Malta and other countries. The application of the law may no longer be domestic law, which is very important To a certain extent, it increases the cost and difficulty of user rights protection.

In May 2012, when Facebook conducted an IPO, Nasdaq suffered a system failure, and its market participants finally received more than 40 million US dollars in compensation. There is such a precedent, so the issue of how users can better protect their rights is not possible. In the case of crossing the above two mountains, we hope to see that one day in the future, domestic users can work together to initiate cross-border litigation against the exchange in the name of the collective, safeguard their rights through legal means, and also through this kind of The behavior forces the trading platform to be more compliant and legal.

Tu Wuyang, senior partner of Beijing Jincheng Tongda Law Firm, told Liandede App that some virtual currency trading platforms use various methods such as false transactions and data fraud to manipulate prices, forcibly lower or increase prices, so as to make them more effective. The customer cannot choose to stop loss or replenish his position, so he can only be forced to lose his position, causing the customer to incur high fees and losses to be allocated privately by the trading platform and agents, and the fact that the trading platform illegally embezzles the customer's handling fees and loss of funds.

These behaviors have the subjective intention of illegally occupying other people's property, and have implemented methods of using fictitious facts or concealing the truth, so that the victim (customer) invested funds on the illegal platform based on his misunderstanding, and the trading platform became an illegal possession of customer handling fees. The tools of loss of funds objectively defraud the victim's money, which meets the criminal constituent elements of the crime of fraud stipulated in Article 266 of the Criminal Law of my country, and are suspected of constituting the crime of fraud.

Under high-pressure supervision, the gray virtual currency trading platform gradually withdrew from

In November 2019, the People's Bank of China issued the "China Financial Stability Report (2019)", which comprehensively evaluated the robustness of my country's financial system since 2018. The report pointed out that since 2018, all 173 domestic virtual currency trading and token issuance financing platforms have withdrawn without risk. Domestic, financial risks are showing some new characteristics and evolutionary trends, and the incremental risks of key institutions and various types of illegal financial activities have been effectively controlled.

Dede Think Tank has sorted out China's relevant regulatory policies on virtual currency trading platforms in the Chain Dede Policy Database in recent years, and found that from September 4, 2017, China has clearly stopped virtual currency trading and at the same time, it is necessary to conduct virtual currency trading venues. Carry out cleaning and rectification. During the subsequent more than two years of supervision, China's regulatory attitude towards virtual currency trading platforms has always maintained high pressure, and relevant regulatory departments have repeatedly warned the market of risk warnings and surveyed the market.

In 2019, according to CCTV reports, a total of 6 newly discovered virtual currency trading platforms in China were closed nationwide, and 203 overseas virtual currency trading platforms were disposed of in 7 batches; through two large non-bank payment institutions, the payment account was closed to a close Ten thousand; in terms of WeChat platform, nearly 300 promotional and marketing mini programs and official accounts have been closed.

The latest "China Financial Stability Report (2020)" released by

in 2020 stated that the rectification work in areas such as virtual currency trading has been basically completed, and it will continue to strengthen central-local coordination and inter-ministerial coordination, and promote various trading venues safely and orderly Clean up and rectify the tough battle.

(To protect the interview subjects, all the victims, investors and other practitioners interviewed above are pseudonyms)

[This article was originally published on Liandede, authorized to be published by Titanium Media App, author: Dawen]