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Cointelegraph gets my statement wrong

February 9, 2017

There’s an article by cointelegraph quoting me as saying that bitcoin is useless for evading capital controls.  They have a nice cartoon picture of me, but they’ve gotten my statement seriously, seriously wrong.  What the reporter seems to have done is to cut and paste a statement I made on quora saying that bitcoin is useless for evading Chinese capital controls.  That statement was accurate at the time I made it, but the reporting didn’t bother asking me about it, or checking my more recent comments on that issue.

I found out about this when another reporting who actually does some fact checking contacted me about it.

In fact since the Chinese government has started to tighten foreign exchange controls, bitcoin has become a viable way of moving money, and I’ve also changed my business model from what it was a year ago do something that seems to work better.

First of all, starting in November the Chinese government has started closing off a lot of the mechanisms for evading capital controls.  In addition, almost all of the non-bitcoin methods of moving money require that you have a Hong Kong bank account and those have been much, much harder to get.

By contrast, the Chinese government hasn’t taken much action against bitcoin.  They have put in a “kill switch” but they are not using it, because their main concern is to maintain China’s foreign exchange reserves, and moving money from bitcoin doesn’t negatively hit their reserves.  The Chinese government has put in the ability to shut down bitcoin transfers if they want do, but right now they don’t want to.

Second of all, my business model has changed.  The first business that I tried was to be the middleman, but that didn’t work.  The trouble is that I was asking for 1.25%, and then the sender and the receiver were both getting 1.5%.  Instead of being a middleman, I’m now the introducer.  The way that I work is that I introduce people that need to move money to the people that actually do it.  They charge 1.25% and then forward 0.25% to me.

The reason I can do this is that I’m one of the few people in the world that can make a post saying “Yes, I will introduce you to people that will move money out of  China with bitcoin.”  Because I’m not actually moving the money (or moving money at all), I don’t need an HK money services license.  Because I’m in Hong Kong, I’m not subject to Mainland legal restrictions providing an end-to-end service for currency transfers.

So if you want to move money out of the Mainland, contact me, and I’ll introduce you to the right people.


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