Just like last year, the People's Bank of China released a notice warning risks regarding virtual currencies . Here's the full text:

China Banking and Insurance Regulatory Commission, the Centralyberspace affairs commission, the Ministry of Public Security , the People’s Bank of China, and the State Administration for Market Regulation co-released the following warning:

Recently, criminals are issuing so-called “virtual currency”, “virtual assets” and “digital assets” to raise fund and violate the legitimate rights and interests of the general public on the disguise of “financial innovation” and blockchain technology. Such activities are not really based on blockchain technology. Instead, they speculate the concept of blockchain for illegal fundraising, pyramid schemes, and fraud. Their main features are as follows:

1,In a new form of Networking and cross-borderization. Relying on the Internet and chat tools for trading, using online payment tools to collect funds, spreading risks to a wider audience. Some criminals rent overseas servers to build a website, carry out activities for domestic residents and remotely control the implementation of illegal activities. Some individuals in chat groups claim to have obtained quotas for high-quality overseas blockchain projects and help users to invest in them, which is most likely a scam. The funds mostly flow to the overseas countries that makes supervision and tracking for these funds harder.

2, having a deceptive, seductive, and hidden nature. criminals tend to hype buzzwords, create a variety of "obscure and high-end" theories, invite influential celebrities to brag for their projects, distribute free airdrops to entice investors, claim that "the value of the currency only rises and never falls", "high returns and low risk. These criminals illegally make profits by manipulating the value of the virtual currency, by setting withdrawal thresholds. In addition, they also issue tokens through new ways of ICO, IFO, IEO or use the concept of sharing economy and IMO to speculate virtual coins.

(note: I guess IFO means initial fork offering, IEO is initial exchange offering, IMO is initial mining offering)

3. There are a variety of illegal risks. Criminals promote their projects by telling investors they could make money simply from buying coins(the so-called static gain), or they could make money by inviting newcomers and get dividends(dynamic gain).