Recently, the People's Bank of China held a coordination mechanism meeting to combat virtual currency trading speculation, emphasizing the continued crackdown on illegal financial activities related to virtual currencies. The regulatory authorities clearly pointed out at the meeting that virtual currencies do not have the same legal status as legal tender, do not have legal compensation, and should not and cannot be used as currency in the market. This sends a clear and strong signal that regardless of how virtual currencies are packaged and innovated, their potential financial risks have received high attention from regulatory authorities, and the relevant regulatory barriers are getting tighter and tighter. Since the rise of Bitcoin in 2013, regulatory authorities have issued multiple notices warning of the risks associated with virtual currencies. Since the beginning of this year, the new trends in virtual currencies have further refined regulatory policies. At this time, the need and urgency to continue cracking down on virtual currencies are self-evident. To understand the ongoing regulatory efforts, it is necessary to first understand the current situation in the field of virtual currencies. On the surface, the prices of major virtual currencies such as Bitcoin continue to fluctuate sharply, indicating significant speculative risks. However, deeper risks are hidden in seemingly safer corners, such as some virtual currencies with opaque reserve assets and insufficient value behind them. For example, a bank claims that the amount of cash deposited by depositors corresponds to the amount of cash in its vault, but upon actual verification, it is found that the asset value in the vault is much lower than promised, which can easily trigger a crisis of market trust. A healthy, stable, and controllable financial system is crucial to the national economy and people's livelihoods. Wang Pengbo, Chief Analyst of the Financial Industry at Broadcom Consulting, pointed out that virtual currencies have characteristics such as anonymity, cross-border nature, and detachment from traditional regulatory systems, making it difficult to implement compliance requirements such as customer identification and anti money laundering. They are easily used for activities such as money laundering, fraud, and illegal cross-border fund transfers. If unregulated virtual currency trading and speculation activities are allowed to develop, it will lay hidden dangers for systemic financial risks. Tian Lihui, a finance professor at Nankai University, analyzed that in terms of money laundering, virtual currencies have evaded the traditional financial customer identification mechanism and facilitated the hidden circulation of black industry funds. In fundraising scams, the so-called "stable fulfillment" promises are often based on opaque reserve assets, essentially a Ponzi scheme of borrowing new to repay old. What is even more severe is that it is transforming into an "underground bank" that bypasses foreign exchange controls, achieving instant cross-border funds through virtual accounts and disrupting the national capital management order. The root of the above risks lies in the technical architecture and operational mechanism of virtual currencies. ”Wang Pengbo analyzed that most virtual currencies rely on public blockchains for issuance, with anonymous transactions and freely generated addresses, lacking a centralized regulatory interface; Tools such as cross chain, coin mixing, and decentralized exchanges blur the flow of funds, rendering traditional risk control methods ineffective. Especially in cross-border circulation, its 7 × 24-hour borderless nature may evade foreign exchange and capital account supervision, posing a threat to national financial security. Cracking down on virtual currency trading speculation is also a practical measure to protect the rights and interests of investors and safeguard the safety of public property. Experts remind that the virtual currency market has high professional barriers, great risks, and information asymmetry, and ordinary investors are easily induced to enter the market by high-yield commitments. Regulatory efforts continue to intensify and issue risk warnings, aimed at preventing more people from being involved in high-risk speculative activities. From a global perspective, strengthening regulation of the virtual currency market is becoming a common choice for major economies. Tian Lihui emphasized that virtual currency is no longer simply a technological innovation, but a cross infection node of systemic financial risks. Its global circulation attribute can not only bypass the transmission of monetary policies of sovereign countries, but also become a carrier for overseas risk input. This meeting further clarified the work ideas for preventing and resolving related risks, reflecting the continuous deepening and refinement of China's supervision with the development of the market. Industry experts have stated that virtual currency trading speculation activities are by no means illegal, and regardless of how their forms evolve, the regulatory principles of maintaining financial security and stability, protecting people's property safety, and promoting healthy financial development will not change. For everyone, the key is to enhance risk awareness, recognize the origin and risks of virtual currency speculation, and stay away from various illegal financial activities. (New Society)