Beijing's new regulations lead to the 3.0 era of judicial disposal of Virtual Money.

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New Trends in the Judicial Disposal of Virtual Money: The Beijing Model Attracts Follow

Recently, the Beijing Municipal Public Security Bureau's Legal Affairs General Team published an article regarding the disposal of involved virtual money, which has sparked widespread discussion within the industry. Many people feel confused about this, and some even believe it means that China might loosen restrictions on virtual money trading. However, this understanding has certain deviations and requires further clarification.

The Essence of the Beijing Model

The Beijing Public Security Bureau and the Beijing Equity Exchange (referred to as "BEE") have signed a cooperation agreement regarding the disposal of the involved Virtual Money. The disposal process is roughly as follows:

  1. The public security organs will entrust the involved virtual money to the North Exchange for disposal.
  2. The Beijing Stock Exchange selects a third party for testing, receiving, and handover operations.
  3. Convert Virtual Money into fiat currency through a compliant exchange in Hong Kong.
  4. After approval by the State Administration of Foreign Exchange, the funds will be converted and transferred to a designated account of the public security organs.

This model has been applied in a case at the Shunyi Branch of the Beijing Municipal Public Security Bureau.

What is the "new channel" for the Beijing Municipal Public Security Bureau's disposal of the involved Virtual Money? Can it be disposed of now?

The Historical Evolution of Virtual Money Disposal

The judicial disposal of Virtual Money in China has gone through three stages:

  1. Disposal Period 1.0 (2018-2021): Direct monetization through exchange OTC or private channels, with compliance risks.

  2. Disposal Phase 2.0 (September 2021 - 2023): Affected by the "9.24 Notice", the main method used is the foreign disposal and subsequent settlement into the country, but there are still compliance issues.

  3. Disposal during the 3.0 period (end of 2023 to present): Adopt a joint disposal model both domestically and internationally, and legally convert after cashing out through compliant overseas platforms.

The new model in Beijing actually falls under the category of Disposal 3.0, which is not a first in the country.

What is the "new channel" for the disposal of virtual money involved in the case by the Beijing Municipal Public Security Bureau? Can it be opened for disposal now?

Characteristics and Issues of the Beijing Model

  1. The Beijing Stock Exchange actually plays an intermediary role and needs to delegate professional service agencies for actual disposal.

  2. Require service providers to provide a performance bond of 110%, which is relatively high in practice.

  3. There are some ambiguities regarding the regulations on service fees. The disposal of Virtual Money is not a typical public auction, so the setting of the reserve price may need further clarification.

It is worth noting that in some regions, the judicial authorities have agreed on disposal fee rates in the handling agreements that are relatively high, with some even reaching up to 35%. Currently, compliant disposal companies typically do not charge service fees exceeding 20%.

Future Outlook

Although the Beijing model has sparked speculation about whether China will liberalize virtual money trading, this view is premature. In fact, the judicial handling of the virtual money involved is ongoing and has not been prohibited. However, this does not mean that China will allow ordinary citizens to participate in virtual money trading in the short term. It is expected that in the next two to three years, mainland China will continue to maintain a strict regulatory stance on virtual money trading.

Overall, the new model in Beijing reflects the ongoing development and standardization trend in the field of Virtual Money judicial disposal, but it does not represent a fundamental shift in regulatory policy. All parties still need to closely follow the evolution of related policies and specific implementation details.

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StableGeniusvip
· 07-17 02:44
predictably inefficient governance model, as i've been saying since 2019
Reply0
BearMarketBuildervip
· 07-16 18:02
When will the trading be unblocked?
View OriginalReply0
0xInsomniavip
· 07-14 18:28
Regulatory risks are hard to guard against.
View OriginalReply0
BlockchainTalkervip
· 07-14 05:27
actually... same old regulatory theater just with fancier buzzwords tbh
Reply0
ChainSpyvip
· 07-14 05:25
Come on, in the end, it still has to be managed to death.
View OriginalReply0
PancakeFlippavip
· 07-14 05:25
When will this regulation be lifted?
View OriginalReply0
Blockblindvip
· 07-14 05:24
Maybe thinking too much.
View OriginalReply0
mev_me_maybevip
· 07-14 05:08
Let's wait and see.
View OriginalReply0
DaoResearchervip
· 07-14 04:59
From the perspective of empirical research, this is an inevitable paradigm shift REF:2021 Regulatory White Paper
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