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 A few days ago, the virtual currency trading platform Binance was deeply involved in a rights protection controversy. Many investors went to Binance’s Shanghai office address to defend their rights. Since the start of the domestic virtual currency investigation and rectification campaign in November last year, although Binance insisted that it did not have an actual office address in the country, as a "prominent", Binance's office address in Shanghai was first seized by the Shanghai police. As early as September 4, 2017, Binance announced that it would no longer provide services to users in mainland China. Today, investors have once again gone to Binance’s Shanghai office address to defend their rights. So does Binance really have no office address in China? Has it no longer provided services to Chinese users? During the investigation, the reporter found that this was not the case. Binance was still providing transactions for users in mainland China by using technical means and operational loopholes outside of supervision. In response to this series of questions, China Net Finance sent an interview outline to Binance for verification, but had not received a reply as of press time.  Investors' rights protection "changes face" and harms partners On May 25, it was reported online that a number of rights defenders went to Binance’s office address in Shanghai to defend their rights. It was reported that this group of users had IEO losses, contract downtime, the inability to close positions and stop losses, and issues such as the delisting of FTX leveraged tokens to collectively defend their rights offline. According to pictures posted online, several investors wearing white shirts were standing under the WeWork office building on Huangpi South Road in Huangpu District, Shanghai, holding up bloody words such as "Binance fraud, He Yi pays back the money" and "Changpeng Zhao pay me back my hard-earned money" to defend their rights. In addition, several investors went to other Binance offices, Shanghai Chuangzhi Tiandi Technology Center, and No. 477 Zhengli Road, Yangpu District, Shanghai to safeguard their rights. Rights defenders said that Shanghai Bijie Culture Network Company has offices here. The reporter searched for Shanghai Bijie Cultural Network Company in Tianyancha and did not find a company with the same name. However, a Shanghai Bijie Cultural Development Co., Ltd. appeared, with its office address at No. 127 Guotong Road, Yangpu District, Shanghai. The legal representative of the company is "ZHAO CHANG PENG" (the same pinyin as the name of Binance CEO Changpeng Zhao). After equity penetration, it was discovered that the company’s shareholder Chen Guangying and supervisor Wang Lilai are also legal persons and supervisors of Shanghai Binance Network Technology Co., Ltd. China Net Finance sought confirmation from Binance regarding investor rights protection, but had not received a reply as of press time. It is understood that since September 4, 2017, Binance has announced that it will no longer provide virtual currency transactions for users in mainland China, and its founders have also moved overseas and started distributed offices. One of the incidents in which investors defended Binance was the FTX leveraged token issue. Public information shows that FTX is an overseas digital asset derivatives trading platform. The platform has rapidly risen in the currency circle by launching extremely radical virtual currency derivatives. Its product designs are often very simple, with high returns but no ability to resist risks. It is regarded as a "casino" by the currency circle. FTX attracted a large number of users in a short period of time, which also attracted the attention of Binance. In December 2019, Binance announced an investment of tens of millions of dollars in FTX and established a strategic partnership. Binance subsequently listed FTX’s leveraged tokens. However, the "honeymoon period" had not yet passed, and Binance delisted FTX's leveraged tokens. At that time, Changpeng Zhao said that the reason was that he found that users did not understand the operating mechanism of FTX's leveraged tokens, and after listening to the opinions of the community, it had to remove it in order to protect users. However, what is surprising is that less than 2 months later, Binance announced that it would list its own leveraged tokens and emphasized the safety of its own leveraged tokens, which caused controversy. Many people believe that Binance made this move because it saw the profitability of FTX, so it defrauded related technology through cooperation. Some users even jokingly said: “To protect users, currency security depends on just one mouth. ” Will Binance return to China and open trading? Website announcement guides Chinese users to download the APP Why do investors still go to Shanghai to defend their rights? Does Binance already have a physical office address in the country and open trading to mainland Chinese users? This is evident on Binance staff’s social platforms. A Weibo user named "Binance's Sisi" has repeatedly published promotional content for Binance, which is essentially a member of the "Binance 101 Girl Group" previously led by Binance co-founder He Yi, who is a Binance employee. cz_binance (Zhao Changpeng), who is certified by Weibo as the founder of Binance, has also forwarded his Weibo content. The content of its Weibo posted on April 29 read: “The China APP has been fully repaired, both spot and futures can be used normally, but the web page still needs tizi. We are very sorry for the inconvenience caused to all bosses, and thank you for supporting Binance." Binance happened to suffer a DNS attack that day, and the contract trading page was stuck. Its Weibo clearly mentioned that the China APP provides spot and futures trading. In other words, Binance provides virtual currency trading in China. Another member of the girl group also posted a tutorial on how to download the Binance APP on social platforms, mentioning that "you can download it without going through the firewall."  The tutorial points out: 1. Android users can directly scan the QR code to download； 2. iOS users can directly download the Testflight version or log in with an overseas ID to download the Binance APP from the Apple Store. The reporter first downloaded the TestFlight test software according to the tutorial, then scanned the QR code to obtain the Beta version of the Binance APP (with time and quantity restrictions), followed the steps to install it step by step, and finally showed that the installation was successful. After registering and logging in, identity authentication can be done to trade. The tutorial also pointed out that "This is an installation tutorial for the internal beta version, with a maximum limit of 10,000 people." "The installation is complete. You can log in to the Binance APP to trade." "If there is a version update later, you can directly click Testflight to install the update without repeating the above steps." Previously, due to the ban on virtual currency transactions in China, a large number of virtual currency trading platforms moved overseas, and the domestic mobile application market was unable to download relevant APPs. However, these platforms have only moved their servers overseas and are essentially still providing trading services to Chinese users. On April 2 this year, the China Internet Finance Association issued a "Risk Warning on Participating in Speculation on Overseas Virtual Currency Trading Platforms." It was mentioned that in order to avoid regulatory crackdowns, some virtual currency trading platforms registered or set up servers overseas to continue engaging in related activities. Due to their "overseas" operations, the operating entities of these platforms are relatively hidden. They frequently change website domain names and server addresses, and use online diversion to offline transactions to evade regulatory crackdowns. In addition to the propaganda by the above-mentioned staff, the reporter also found that Binance’s official website, binancezh.com, was also issuing announcements instructing users in mainland China to purchase virtual currencies.  In the article "Teaching you step-by-step how to buy Bitcoin" published on the official website, it was informed that mainland Chinese users need a non-mainland Apple ID to download the IOS APP. They can obtain a free Apple ID by adding WeChat, etc., in order to circumvent the operator's domestic restrictions on downloading the Binance APP. The announcement also specifically reminds users to "please bind a mainland Chinese mobile phone number to facilitate OTC" and complete identity authentication.  Binance launched a C2C business earlier, providing direct purchase channels for virtual currencies for legal currencies in many countries, including the RMB. Binance said that C2C transactions are transactions between users. Binance only provides OTC transaction entrances and builds an intermediate platform. It is worth noting that Binance’s official Weibo once explained that Binance C2C is the “one-click currency buying” business on the Binance platform. There are two modes in China: “Quick Zone” and “Auto Zone”, which respectively correspond to B2C business (transactions between the platform and users) and C2C business (transactions between users). In addition, recruitment information shows that Binance is still recruiting senior managers (customer support), graphic designers and other positions with Chinese capabilities in Asia. Since last year, my country has been cracking down on virtual currency transactions, and one of the areas included in the rectification is the organization of virtual currency transactions within the country. Has Binance’s practice of providing test versions and free Apple IDs to domestic users actually organized virtual currency transactions in China? In response to the content released in the announcement, China Net Finance sent an interview outline to Binance, but had not received a reply as of press time. However, when reporters searched the above announcement again on its official website, they found that it had been deleted. Announcements such as "How to open a fiat currency wallet" and "Step-by-step instructions on how to buy coins quickly" with overlapping content were also deleted.  Binance’s recent response to the media stated that the Binance APP cannot be downloaded from the Chinese application market. Binance’s business covers more than 180 countries and regions around the world. If mainland users are overseas or use overseas IDs to conduct transactions, it is more difficult to identify. At the same time, Binance said binancezh.com is the company’s test website, and most of its users are from Egypt. This also confirms from the side that Binance knows that the Chinese application market cannot download the APP, so it uses technical means to circumvent supervision, thereby providing services after Chinese users complete the download steps. In terms of identity authentication, as long as they can download the APP, even mainland Chinese users can conduct transactions. Pushing high-yield financial product Fcoin is a warning for running away The above-mentioned official website of binancezh.com shows that Binance also provides users with fixed financial products with high annualized returns. It is reported that Binance provides users with the "Binance Treasure" product. Users can obtain fixed income by purchasing related virtual currency products, which is divided into two parts: current and customized. The income comes from Binance's currency margin lending business. The reporter found that the customized financial products provided by Binance Bao have extremely high yields, which also means high risks. For example, COTI, one of the virtual currency products, has a 30-day annualized rate of return of up to 18%. Perhaps due to the high yield, the original subscription deadline of June 28 has ended early. The virtual currency ERD has a 7-day annualized rate of return of 10% and a 14-day annualized rate of return of 12%. Another virtual currency, APRA, also has high returns, with a 30-day annualized return of 15%, and the same number of subscriptions is 150 million. In addition, after the subscription ended in April and May, there are still many products with 30-day annualized returns of more than 10%. Its most recent Binance Treasure customized product ONE, which is still available for purchase, has a 90-day annualized return of up to 16%.  Behind the high yield lies redemption risk. Most of the assets and income of existing virtual currency trading platforms are virtual currencies, and the virtual currency market fluctuates greatly, and extreme prices often occur. For example, on March 12, the price of Bitcoin once fell from over 7,000 US dollars to 3,800 US dollars, a short-term drop of 3,200 US dollars. Other virtual currency currencies also fell accordingly, and the assets of the trading platform faced a sharp decline in an instant. The trading platform plays a centralized role and has certain room for manipulation of user assets. Users may face the risk of being unable to pay at any time. At the same time, most of the virtual currency products provided by Binance are small and unknown currencies. It is difficult for users to judge their actual value, and it is more difficult to bear the risk when encountering extreme market conditions. Although the interest is guaranteed, in the face of a sharp drop in the market, its depreciation rate is much greater than the asset appreciation rate achieved through financial management. FCoin, which ran away not long ago, is an example. The platform attracted a large number of users due to its high dividends at the beginning, but finally chose to run away because it failed to redeem nearly 1.3 BTC (approximately US$127 million, based on the previous valuation), and the funds in the user's financial account on the platform could not be reflected. After it ran away, a platform called ExinOne issued an announcement saying that because some assets were stored in FCoin's financial account, the latter's currency withdrawals were uncontrollable, resulting in Yubibao products having to suspend deposits and withdrawals. In addition, the true value of the virtual currency listed on Binance’s sales platform launchpad has also been questioned by investors. On December 5, 2019, Binance launched the project token Troy of the blockchain project TROY on the platform. It was recently accused by many investors of causing huge losses due to investing in the project, and the token was once close to zero during the extreme market conditions on March 12. It is reported that Binance claims that the platform aims to support and incubate valuable blockchain projects and has strict review standards for projects listed on the platform. In the eyes of industry insiders, Binance is gradually moving towards a "casino". Whether it is self-"slapping" in launching high-multiple contract products, going back on promises and harming partners, or launching zero-return projects, high-end financial management, etc., Binance's purpose is nothing more than to obtain more profits, and in its centralized position, all rules and gameplay are formulated by Binance. This also means that Binance is vulnerable to backlash, and its "self-talk" approach has caused a crisis of trust among users. Source: China Net Finance New media editor: Xu Zheng China Net Finance official WeChat (ID: zgwcjzx)  |
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