Summary: Yellen posted her views on cryptocurrencies at the hearing, saying the United States should be aware of emerging tools for terrorist financing. Cryptocurrencies have a chance to be abused by illegal financing, and the government will need to review the ways in which they can be used and ensure that money laundering is not carried out through these channels. After Yellen made a comment, Bitcoin began to decline continuously.
China Times (www.chinatimes.net.cn) reporter Hu Jinhua, intern reporter Zhao Yi reported in Shanghai
On January 22, Bitcoin continued to decline, once falling to US$28,845, a drop of 17.83% from the highest price in 24 hours of US$35,102. As of press time, the price of Bitcoin is now at $31,097.71.
At the same time, the A-share blockchain sector also performed poorly. As of the close, the Shenzhen Stock Exchange Blockchain 50 Index was 4084.53 points, down 0.81%. The blockchain sector closed down 1.91%, while the digital currency sector closed down 2.57%.
"Bitcoin is a high-risk asset. The only way for investors to get returns is the rise in the price of Bitcoin, so it is easier to form a speculative bubble. In the past month, Bitcoin has risen to $40,000 in a short period of time, and has accumulated a lot of risks. With the recent market news that the Federal Reserve may withdraw from loose policies in the future and the newly appointed U.S. Treasury Secretary claims to strengthen supervision of digital currencies, the market has thus entered a panic stage and then plummeted." Li Lianxuan, chief researcher of Ouke Cloud Chain Research Institute, told the reporter of " China Times ".
U.S. Cabinet candidates will affect the crypto market
U.S. time, US time, US presidential elected Biden (Joe Biden) was sworn in. Former Federal Reserve Chairman Janet Yellen also attended the "Appointment Hearing" held by the U.S. Senate Finance Committee on the 19th. After the Senate confirms this week, Yellen will be the first female Treasury Secretary in the United States.
Yellen delivered her views on cryptocurrencies at the hearing, saying the United States should be aware of emerging tools for terrorist financing. Cryptocurrencies have a chance to be abused by illegal financing, and the government will need to review the ways in which they can be used and ensure that money laundering is not carried out through these channels.
is a coincidence. Recently, ECB President Lagarde also expressed concerns about cryptocurrencies. He said that Bitcoin is a highly speculative asset that involves money laundering activities, and a regulatory consensus on Bitcoin is needed at the global level.
After Yellen expressed his opinion, Bitcoin began to continue to decline. Annabelle Huang, partner of Amber Group, a global crypto financial intelligent service provider, said that the key factor in Biden's inauguration as US president affecting the future cryptocurrency market is the appointment of his cabinet. Gary Gensler, who is friendly to blockchain and cryptocurrency, was appointed by the U.S. Securities and Exchange Commission (SEC) chairman, may have a positive impact on the industry; and the recent remarks of U.S. Treasury Secretary nominee Janet Yellen's cryptocurrency may indicate further strengthening of subsequent industry regulation; and Brian Brooks, a former former crypto market participant, has just stepped down as the director of the U.S. Currency Comptroller (OCC), this position is particularly critical to the candidate and proposition of the successor of the U.S. Commodity Futures Trading Commission (CFTC). ”
In response to this round of Bitcoin price decline, Craig Erlam, senior market analyst at Oanda, US brokerage platform, said: “After a strong performance, Bitcoin showed some vulnerability: it encountered pressure at $34,000 on Wednesday and has been falling since then, with a high probability of continuing to run around $30,000. This level looks very fragile, and falling below this level may be bad news in the near term for Bitcoin and cryptocurrencies. "He also said that even if the price of Bitcoin fell to $20,000, he would not be surprised.
is often used for illegal activities such as the "dark web" and
In fact, Yellen's concerns are very necessary. While promoting the development of global finance, cryptocurrencies such as Bitcoin are also widely used in shameful underground trading fields such as money laundering, drugs, and population transactions.
On January 12, the German police destroyed the world's largest dark web trading platform, DarkMarket (black market), and seized more than 20 servers on Moldova and Ukraine. The operator of the "black market" has also been arrested by the police. A reporter from the China Times learned that the dark web has nearly 500,000 customers, with a total of more than 2,400 sellers, mainly trading drugs, counterfeit money, anonymous SIM cards, stolen credit card data, and malware. More than 320,000 transactions processed through the dark web, and the cryptocurrency turnover used in payments was approximately 140 million euros, of which more than 4,650 bitcoins and 12,800 Monero were transferred in the dark web market.
in the country, cases of illegal activities using cryptocurrencies are also common. In October 2020, Zhejiang Wenzhou police cracked a case of drug trafficking using virtual coins, criminally detained four suspects, and seized more than 16 kilograms of finished drug and marijuana. In order to evade investigation, the criminals contacted the forum through on-site messages and made transactions through virtual currency transfers.
financial writer Zhou Xibing told the reporter of the China Times that the reason why cryptocurrencies have become money laundering and terrorist financing tools that criminals are keen on is security first. Under the US dollar system, large or frequent receipts and payments may be targeted by . The FBI . Once targeted, all its transactions will be controlled within the scope of the US's attack, and such transactions are very dangerous. The second is concealment. Criminals are engaged in shameful businesses. The more hidden they are in the transaction process, the higher their safety factor will be. When the Internet became popular, although daily online payments were very convenient, they were all within the monitoring range, but cryptocurrencies could not be monitored. In addition, using cryptocurrencies to trade can also shorten the transaction process of criminals and make transactions more convenient.
"Although cryptocurrencies are widely used in illegal activities, they will not affect the development of cryptocurrencies. Because technology itself does not have good or evil, and the important thing is the manipulators. In addition, with the improvement of various technologies, the transactions of criminals will also be monitored. Therefore, the development of cryptocurrencies will not be used by criminals because of the use of them." Zhou Xibing said.
Zhou Xibing emphasized to reporters that cryptocurrencies must be issued by sovereign states, and any currency issued must be traceable. Cryptocurrencies should be defined as sovereign currency and are not allowed to issue them privately by companies or individuals. In order to effectively prevent cryptocurrencies from being used for illegal activities such as money laundering, we must work hard on the liquidity and traceability of Canadian currency. Through emerging technologies such as blockchain, we must strengthen the traceability of Canadian currency, track the flow of cryptocurrencies, and block the transactions of criminals through comprehensive analysis of various data.
In response to this, Su Xiaorui, an expert in the financial technology industry, also told the reporter of the China Times that the government and regulatory departments should enter the underlying payment and account system to better resolve the money laundering risks of cryptocurrencies. Taking my country's digital RMB as an example, adhering to centralized supervision of the central bank can resist the erosion of crypto assets and global stablecoins, and on the other hand, it can strengthen asset flow tracking, which will be helpful to anti-money laundering work.
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