Virtual currency has repeatedly experienced great storms and cannot continue to be "uncontrolled"

Recently, a number of companies involved in virtual currency transactions in Hong Kong have been deliberately sabotaged.

While these acts of vandalism are illegal, they also reflect some of the misery of virtual currency trading.

Since the beginning of this year, as the U.S. Federal Reserve has entered an interest rate hike cycle that affects the macro money supply, extremely speculative virtual currencies have inevitably fallen into a falling wave.

The most famous virtual currency, Bitcoin, has halved from a peak of $67,000 late last year to around $30,000 now.

The stablecoin TerraUSD (USDT) has been seriously decoupled from the US dollar, and the related cryptocurrency Terra (LUNA) has almost returned to zero.

(CoinMarketCap)

In addition to the big wave of the overall deterioration of the financial environment hitting risky assets, there has also been a local storm in the virtual currency industry before.

Earlier this month, TerraUSD and Luna, the “stable coins” issued by South Korea’s Terra Company with blockchain technology to maintain their value, were short-sold and plummeted.

The market value of TerraUSD, which is 1:1 pegged to the US dollar, has dropped from close to US$1 to US$0.06; Luna has plummeted from more than US$80 to US$0.0001, which is almost equivalent to becoming a waste.

This "stablecoin" storm has even attracted the attention of U.S. financial regulators. Treasury Secretary Janet Yellen re-emphasized the urgency of developing a regulatory framework for stablecoins and called on Congress to authorize the regulation of stablecoins.

Last weekend, Yonhap News Agency reported that South Korean prosecutors are studying whether to indict Do Kwon, the founder of Terra’s stablecoin, on charges related to a “Ponzi scheme”.

Since Bitcoin became popular, the technology and concept of virtual currency have changed with each passing day, and various new coins have emerged one after another. In addition to relying solely on blockchain or algorithm technology, there have also been "stablecoins" linked to physical objects, or Recently, a lot of attention has been paid to the idea of ​​"non-fungible tokens" (NFTs) that each currency has different content and value.

The rapid development of virtual currency has undoubtedly brought innovative business opportunities, but at the same time its risk level is also extremely high.

The recent virtual currency turmoil reminds us once again that even if we do not completely ban virtual currency, it is time to step up regulation of virtual currency trading.

Of course, "high risk" alone is not a reason for the government to regulate the purchase or sale of an item or a derivative transaction...

For details, please read the 318th issue of "Hong Kong 01" Electronic Weekly Newsletter (May 23, 2022) "

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