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Polymarket Exploit Arbitrage, Sonic Airdrop Accidentally Burned by Random Person, What's the Overseas Crypto Community Talking About Today?
Publication Date: January 19, 2025
Author: BlockBeats Editorial Team
Over the past 24 hours, the crypto market has seen complex developments across multiple dimensions. The mainstream discussion has focused on the escalating regulatory standoff between Coinbase and the banking camp, as well as the Polymarket vulnerability exploit exposing the risk management weakness of prediction markets. In terms of ecosystem development, Solana has accelerated RWA and payment implementation, Ethereum continues to enhance its infrastructure around AI and DeFi components, and the Perp DEX track has shown signs of intensified competition amid declining revenues and project migration disputes.
I. Mainstream Topics
1. Coinbase at Odds with Banking Camp over Crypto Legislation
The White House is considering fully withdrawing its support for the cryptocurrency market structure bill if Coinbase does not return to the negotiating table and reach a profit-sharing arrangement with banks. The bill, seen as the "Trump President's bill," has caused the White House to be quite annoyed by Coinbase's unilateral move on Wednesday, even describing it as a "rug pull" on the White House and the entire industry. Coinbase CEO Brian Armstrong responded by stating that the White House had maintained constructive communication before and that the team is discussing how to support community banks, but White House political support apparently still depends on the negotiation outcome. Meanwhile, Trump has publicly denied offering the Fed chair position to JPMorgan Chase CEO Jamie Dimon and threatened to sue JPMorgan Chase within two weeks for its involvement in "debanking" practices. This discord is also seen as an extension of power play between JPMorgan Chase and forces like BlackRock.
The overall community sentiment is largely in favor of Coinbase, with many believing that traditional banks are trying to manipulate the bill details to cement their own interests, with some even shouting "banks go home" or "no bill is better than a bad bill." Some view this conflict as a political theater within the financial-industrial complex: Coinbase represents the emerging forces against the traditional financial order. However, another faction criticizes the White House for leaning more towards banks than users. The atmosphere is highly charged, with discussions focusing on "prioritizing user protection over giving way to banks," and many even believe that Coinbase's tough stance is forcing the industry to innovate faster.
2. Polymarket Exploited with Vulnerability Arbitrage: Weekend "Low Liquidity Harvesting"
A trader (@a4385) exploited Polymarket's 15-minute "Up or Down" short-term market (such as XRP, BTC) over the weekend when liquidity was low. By purchasing around a $1 million worth of the underlying asset on the Binance side, they manipulated the price, forcing the market to settle in their favor, earning a net profit of over $233,000 in a single trade. This operation was repeated multiple times, directly draining funds from several trading bots' pools, with one bot even losing its entire year's profit. More controversially, Polymarket's volume and influence have grown to the point where it can reverse lever Binance's price, exposing a structural flaw in prediction markets under short-term mechanisms.
The community reacted with both shock and complexity to this "Wall Street Bets-style" operation: Some called it "crazy" and "highly technical," while others criticized Polymarket for lacking sufficient risk control and restraint mechanisms, allowing the market to be easily manipulated. More voices pointed fingers at the liquidity provider, arguing that its risk management was ineffective and quote adjustments were not timely, leading to bots being repeatedly "harvested." Some also argued that this was not merely abuse but a thorough exposure of liquidity design flaws under weekend stress testing. Overall, public opinion is calling for stricter mechanisms while also acknowledging that this arbitrage event precisely demonstrates that Polymarket is entering a new stage of "external market impact."
3. WalletConnect Launches POS Stablecoin Payment Service
WalletConnect partnered with Ingenico to launch stablecoin payment functionality on POS terminals, attempting to bypass traditional banking and credit card networks through "on-chain direct payments." The service integrates as an additional "tag/app" on existing POS systems: After scanning, users can select a chain (e.g., SOL, ETH) in wallets like MetaMask and complete the signature to achieve on-chain payments. Some view this as a significant breakthrough for on-chain assets moving to offline consumption scenarios, but the actual process still heavily relies on users informing cashiers and completing multiple manual steps.
The community widely praised this as a "BD Masterclass" landing, using minimal modifications to bypass intermediaries and drive stablecoin real-world adoption. However, criticisms are also concentrated: The UX still appears cumbersome, as users not only need to explain what "WalletConnect stablecoin payment" is but also select chains, sign, leading to awkward communication and low conversion. Many believe it is difficult to replace crypto cards in the short term (the latter requires no additional training, just tap and go), and a more feasible approach would be to add "supports stablecoin payments here" stickers, provide staff training, and offer a more intuitive interactive experience. The overall tone is optimistic, but most emphasize that this is just the first step, with key issues such as merchant accounting, reconciliation, and user habit migration to be addressed in subsequent steps.
4. Visa's On-Chain Credit Card Settlement Accounts for Over 90%
Visa, through early partnerships with emerging card issuance project providers (such as Rain, Reap) and related infrastructure providers, has secured over 90% of on-chain card transaction volume. Its core strategy is "single-point integration, scale replication": by partnering once to reach dozens of downstream card products, thereby rapidly expanding coverage. The report emphasizes that Visa's high adaptability allows it to quickly capture the incremental demand brought by native crypto issuers; meanwhile, Artemis's comprehensive study further elucidates how stablecoin payments bridge digital assets with the global commercial system through card networks.
The community has high praise for Visa's Crypto Lead Cuy Sheffield, believing that he has steered Visa away from the "disruption" path within 2–3 years post-graduation, seen as a representative of an "internal CEO" figure. The discussion not only acknowledges Visa's strategic decisions and first-mover advantage but also warns of looming threats: CBDCs, super apps, and more native blockchain payment networks that could gradually erode the card networks' moat. Some perspectives suggest that the banking system's vitality may be more resilient than card networks, and stablecoin cards may only be a transitional solution. Overall, the community still recognizes Visa's leading position but also urges it to adapt to the next generation financial order through deeper infrastructure entrenchment (e.g., equity/ownership structure in relevant networks).
II. Mainstream Ecosystem Updates
1. Solana
5 Metal ETFs Go On-Chain: From Gold and Silver to Copper, All Tradable 24/7
Remora Markets announced the launch of 5 new real-world asset (RWA) products on Solana, tokenized ETFs of gold, silver, platinum, palladium, and copper, corresponding to $GLDr, $SLVr, $PPLTr, $PALLr, $CPERr, now tradable on-chain in real-time, supporting tokenization, programmability, and on-chain operations. Supported by Step Finance, the project aims to bridge the asset pathway between TradFi and DeFi.
The community is excited about this wave of "commodities tokenization," seeing it as another key advancement in achieving 24/7 trading of traditional assets on Solana. Many view it as a demonstration of "Tokenize everything" and look forward to bringing more commodities (even oil) onto the chain. At the same time, there are significant doubts: some criticize the weak liquidity, struggling to fill orders over $10,000, leading to a "looks good, feels clunky" situation. Some joke that "uranium is next," with an overall optimistic atmosphere, but a clear consensus—adequate liquidity is essential to truly attract large funds.
Rainmaker Introduces Ghost Wallets
Rainmaker introduces Ghost Wallets feature: users deposit SOL and AI agents automatically grow the funds 24/7 (e.g., participating in sports prediction markets), then spend directly anywhere via Neo card. This feature emphasizes privacy—on-chain activities cannot be traced back to specific users and is partially supported by Radr Labs, attempting to address the friction users face in cashing out after gains on Pump.fun through "withdrawal KYC + waiting period."
The community widely praises this "Privacy + Automation + Consumption Loop" design, calling it a "huge win," noting its significant reduction of redemption friction and KYC pain points. Many emphasize "privacy is everyone's right." Of course, some are curious about the actual operational model and even worried about its potential risks and compliance boundaries. Overall feedback remains mostly positive, with discussions also boosting attention for $RAIN and $RADR.
2. Ethereum
x402 Hackathon Finale: Foundation Reveals Winning Projects, Betting on "AI + Payment Infrastructure"
The Ethereum Foundation-supported x402 hackathon concluded with the announcement of winning projects, including: Superfluid's x402-sf (native continuous subscription payment infrastructure), Cheddr Payment Channels x402 (efficient micro-payment channels), x402rorg (refund and arbitration protocol), among others. The overall direction is clear: to provide more efficient payment and trust components for AI and agent-based economies on Ethereum.
The community generally believes that such projects are hitting the key vertical of this cycle, the "intersection of AI and decentralized infrastructure," and acknowledges their role in driving agent-based economies, micro-payments, and composable financial modules. A few people joke, "The project is good, but when will the price pump," yet the main discussion still revolves around practical value, maintaining an overall positive atmosphere.
Optimism Launches Actions: Compressing DeFi Integration from "Weeks" to "Hours"
Optimism releases the Actions SDK, an open-source TypeScript toolkit that allows developers to quickly integrate DeFi functions such as lending, trading, and payments, shortening the integration cycle from weeks to hours. This SDK supports embedded wallet systems like Privy, Turnkey, Dynamic, and is compatible with mainstream protocols like Aave, Morpho, while also adapting to multiple EVM networks, including Ethereum, OP Mainnet, and Base, providing a unified configuration file to manage assets, chains, and compliance settings.
Developers strongly applaud its direction of "turning complex integrations into standardized calls," with some even describing it as an efficiency leap from "2000 lines of code to 20 lines," expecting it to further drive the migration of payment applications and Fintech onto the chain. However, there are voices questioning whether traditional finance will truly accept an on-chain 5%-10% revenue model or remain in the wait-and-see phase. The overall sentiment is optimistic, believing this will accelerate the expansion and implementation of the Optimism L2 ecosystem.
Base Ecosystem Project Ethos Hosts Vibe Coding Hackathon
The Ethos Network hosted the Vibe Coding Hackathon on the Base chain, with the goal of building a reputation system for the Ethereum ecosystem: turning "trustworthiness" into a verifiable, tradable, composable on-chain asset through a mechanism of peer-to-peer review and ETH staking. The event was divided into multiple categories, with a prize pool of tens of thousands of dollars, aiming to provide a more reliable trust foundation for the crypto world.
Participants showed great enthusiasm, viewing it as an "insider opportunity" or even a potential entry point into the industry. Some shared their leaderboard experiences, while others expressed concerns about the fairness of the selection process, joking that "if they win, they might still be suspected of insider dealings." The overall atmosphere was lively, with a strong sense of community collaboration, but some voices were heard requesting a more open judging mechanism to increase participation from non-Ethos employees and reduce controversies.
3.Perp DEX
Hyperliquid Revenue Declines, Pump.fun Still Making Millions Daily
DefiLlama data shows that Hyperliquid dropped out of the top five in the 24-hour revenue ranking, in stark contrast to Pump.fun, which continues to maintain a daily revenue of over $1 million, almost unaffected even during market downturns. This contrast quickly raised doubts in the market about Pump.fun's revenue structure: whether there are wash trades, bot-driven volume inflation, or other unnatural traffic.
The community was generally shocked by Pump.fun's "consistently high revenue," with evaluations ranging from "outrageous" to "suspicious." Many suspected that its internal mechanism was creating fake volume to attract more funds, and some even called for ZachXBT to intervene and investigate. Some directly referred to it as a "money laundering machine." The overall discussion was filled with skepticism and ridicule but also implied a consensus: Hyperliquid's decline indicates intensified competition in the Perp space, where the traffic is not loyal.
Trove Major Dump $HYPE + Solana Migration: Chain Move, Gambling Funds, TGE Delay Triple Red Flags
Trove Markets announced a shift from Hyperliquid to Solana, citing that its liquidity partner sold about $5 million worth of $HYPE, causing the project to halt development on HyperEVM. The project team requested ICO participants to connect their Solana wallets to claim $TROVE tokens, while ZachXBT revealed that the team bridged $45,000 of angel round funds to a "casino deposit address," further fueling fraud suspicions. The TGE was also postponed to January 19 at 4:00 p.m. UTC.
The community response has been overwhelmingly angry: many have directly labeled it as a "classic rug pull / last-minute scam," demanding a full refund and criticizing the team for gambling behavior and inadequate disclosure in advertising. Some have also mocked this as a "social experiment," suggesting that the chain migration, TGE delay, and unusual fund flows raise multiple red flags. Overall sentiment is highly negative, with widespread predictions that $TROVE will quickly collapse after launch, and calls for further investigation.
4. Others
Sonic unclaimed airdrop manually burned by a "random bystander": Contract lacked permission control
The unclaimed airdrop from Sonic Labs (approximately 16 million $S) was manually triggered for burning by a community member due to a lack of access control on the burn function—anyone could invoke it. The final burn amounted to around $1.28 million. This incident thereby indirectly exposed the team's confusion in contract design and process management.
While some in the community hailed the triggerer as a "hero," others ridiculed the Sonic team as "headless flies," with some even quipping that "random bystanders are more diligent than the development team." Many viewed this as a clear engineering and risk control flaw, further deepening suspicions about Sonic's vague roadmap, governance chaos, and potential fraud. Of course, some have interpreted this from another perspective: it resembles more of a live demonstration of "community self-rescue"—albeit in a rather ironic manner.
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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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