China’s BSN Chair described unregulated crypto as “Ponzi Schemes”

Key Takeaways

Yifan He described the virtual currency concept model X-to-earn as a “phishing strategy.”  He believes all unregulated cryptocurrencies, including Bitcoin are Ponzi schemes

Yifan He, CEO of Red Date Technology, is the latest to express his skepticism towards private cryptocurrencies. Red Date Technology is the tech firm involved in developing China’s major blockchain project, the Blockchain Service Network (BSN).

In an article published in a local newspaper, Yifan He alleged Bitcoin for having a Ponzi-like nature. According to him, cryptocurrencies absorb funds by promising high returns, and then use the funds of new investors to pay the interest of previous investors to create the illusion of making money, and then defraud more funds. Yifan He further described the virtual currency concept model X-to-earn as a “phishing strategy.” 

According to him, the X-to-earn project’s ultimate purpose is to attract users to the hype trading of rights and interests. Yifan He stated that all unregulated cryptocurrencies, including Bitcoin, are Ponzi schemes based on his understanding, just different risk levels based on the market caps and a number of users.

The Red date Technology CEO is, however, not entirely against virtual currencies. He has a positive reception towards stablecoins like USDT and USDC since they are payment-related currencies and not speculative assets. The BSN Chair believed stablecoins would be doing just fine if properly regulated.He further added that he had never possessed any cryptocurrency wallet or related assets ever.

According to media reports, he is against governments adopting BTC as legal tender. The tech expert stated that El Salvador — which opted to adopt BTC as legal tender — “seriously need basic financing training.” He believes countries like El Salvador’s intention is to build state-owned crypto trading platforms and scam off on their citizens.

His comments comes against the backdrop Chinese Government imposing stricter bans in the crypto industry. In May 2021, China prohibited financial institutions from engaging in any crypto transactions in May. Then later, the government banned all domestic crypto mining in June and finally outlawed cryptocurrencies outright in September. Despite the mountain of bans, China remains one of the major crypto mining hub, accounting for between 65% to 75% of the total “hash rate” — or processing power — of the bitcoin network. Crypto miners in China continue to take measures to work around Beijing’s ban.