Oxford’s Financial Edge: Easy Money Strategies In Forex Trading And Mining

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Oxford’s Financial Edge: Easy Money Strategies In Forex Trading And Mining – Now every app wants to lend you money. This is putting some users into debt and portends a wider crackdown.

Xu Hai received a text message ad when he was in dire need of money. It was the summer of 2020, and a 37-year-old Foxconn worker from the inland Chinese province of Hunan had been unemployed for several months. Xu was no stranger to microloans: he had been taking them out since 2018, first from several national banks and then from fintech platforms such as Alipay and WeChat. The pandemic further worsened his financial situation. He had to borrow more.

Oxford’s Financial Edge: Easy Money Strategies In Forex Trading And Mining

Oxford's Financial Edge: Easy Money Strategies In Forex Trading And Mining

The text encouraged Xu to borrow directly from Meituan, a technology company that has grown from a Yelp-like app into a giant corporation that offers food delivery, bike sharing, ride-hailing services and more.

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Xu accepted the offer because he needed to pay back other loans he had taken out. And Meituan wasn’t the only place he turned to. Xu now owes money to eight microlenders, five of which are big names in Chinese tech: Alipay, WeChat, Meituan, 360 and Xiaomi. These days, seemingly every Chinese app, regardless of its original purpose, also pushes users to lend money. “Weibo tells me it can lend me money; a delivery app tells me it can lend me money; and now even a photo editing app tells me it can lend me money,” wrote one Weibo user last month. “I have 32 programs on my phone. Maybe 30 of them turned into micro-lending programs.”

Over the past year, the Chinese public and the state have been under intense scrutiny. Concerns are growing that they have tricked young people into overspending and pushed total consumer debt to dangerous levels. The Chinese government proposed new rules in November to tighten regulation of online microloans. Although the rules are not yet official, their predicted effects have already caused Ant Group’s blockbuster IPO to be suspended. If they become official, they will almost certainly end the rampant lending to tech companies.

“China is the first major country where technology companies have evolved into major financial intermediaries,” said Sampat Sharma Narianuri, fintech analyst at S&P Global Market Intelligence.

China’s major technology players have been working with microlending services for years; this is one direct way to monetize a massive user base. For payment apps like Alipay and WeChat, this is natural. In late 2014, Alibaba affiliate Alipay launched Huabei, an online credit card-like service that allowed users to buy goods on Alibaba’s e-commerce platforms with credit. Ten months later, the company launched another service, Jiebei, which offered unsecured microloans that could be used anywhere. Both products became popular almost instantly.

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But it came as a surprise when other applications joined the game, many of which have nothing to do with fintech. According to Chinese tech site iFanr, of the 20 most used apps in China – from photo editing to file sharing, from maps to streaming platforms – all have some form of in-app lending service.

David Yin, vice president and senior analyst at Moody’s Financial Institutions Group, said the growth of Chinese fintech platforms really accelerated in 2015. “Financial innovation was encouraged at the time with very loose regulatory requirements,” he said.

Things quickly got weird when a bunch of non-finance tech companies joined the party. Tencent and Baidu launched their micro-lending service in 2015; JD, an e-commerce platform, in 2016. In the years that followed, hardware makers like Xiaomi and (non-fintech) software companies like Weibo, Meituan and ByteDance launched their own microlending products. They had good commercial reasons for doing so: offering microloans could attract new users, create a new revenue stream and reduce the fees charged by credit card issuers for transactions on the platform.

Oxford's Financial Edge: Easy Money Strategies In Forex Trading And Mining

“The low penetration of traditional banking services has created an opportunity for technology companies to step up and meet the credit needs of customers,” said Sharma Narianuri. For the generation that grew up with smartphones, turning to an online credit service like Jiebei is more natural than applying for a credit card.

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It’s now easier to count the big tech players who don’t offer microloans than the ones who do.

With so many options on the market, they have to fight for attention with predictably annoying and dangerous consequences.

Weibo users complain that the app constantly promotes its micro-lending service through mobile ads with only a tiny tag indicating that it is an ad. “Even if you urgently need money, you should not turn to illegal lenders! Contact Sina Official Credit Services,” one of the messages said. This ad also states that the maximum loan amount is around $30,000 with a daily interest rate of up to 0.03% – that sounds low, but not when you compound it over months or years. Many lenders, including Weibo and Meituan, have been accused of false advertising, with users complaining that they were tricked into running the service without knowing the processing fees. After all the fees, the real annual interest rate is often around 36% or even higher than the maximum rate allowed by Chinese law. There are countless complaints on social media about debtors being bombarded with calls, texts and WeChat messages, some even sent to colleagues and friends, urging them to pay back their loans.

Financial regulators have been slow to address these issues, in part because the Chinese state has previously been concerned about systemic risks from (unregulated) peer-to-peer lending services.

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But now the microlending of big tech is getting full attention. During a December press conference, the China Banking and Insurance Regulatory Commission outlined the risks associated with fintech platforms. “There are issues such as poor corporate governance, profiting from a data monopoly, encouraging excessive borrowing and excessive leverage,” the spokesman said. The regulator also said it would conduct additional inspections of individual platforms.

It’s unclear when new rules aimed at curbing microlending will take effect, and how tech companies will respond. There may be workarounds, particularly for companies that can obtain licenses to operate “consumer finance” companies, an area not affected by the new rules.

But it’s clear that the era of free fintech rules is over. Online lending “will be subject to a similar regulatory framework as traditional financial institutions,” Yin said. When that day comes, some of China’s favorite apps may have to turn their attention away from lending and get back to what they do best.

Oxford's Financial Edge: Easy Money Strategies In Forex Trading And Mining

Zeyi Yang is a former reporter | China. He previously worked as a reporter for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also worked for the South China Morning Post, Nikkei Asia, Columbia Journalism Review and other publications. In his spare time, Zeyi co-founded the Mandarin podcast, which tells the stories of LGBTQ people in China. He has been playing Pokemon for 14 years and has an amazing favorite choice.

The Xx Edge

The Big Lebowski, SNL and Doctor Strangelove have been cited in his decisions in major cryptocurrency cases. That’s because he wants you – yes, you – to read them.

How Zia Farooqui (right) weighed the cases before him could give lawyers clues as to which legal frameworks will pass muster.

Veronica Irwin (@vronirwin) is a San Francisco-based reporter covering fintech. She was previously at the San Francisco Examiner, covering technology from a hyper-local perspective. Prior to that, her name was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisk.

This is not a quote from The Big Lebowski—at least not directly. This is a quote from a Washington, D.C. District Court memorandum on the role of cryptocurrency analytics tools in government investigations. The author is Justice of the Peace Zia Faruqi.

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It’s not uncommon for judges to reference pop culture and not have the same level of cryptocurrency expertise as Farooqui. His productions included clever references to “The Big Lebowski,” “Doctor Strangelove,” and “SNL” parodies of McLaughlin’s band. They also demonstrate a uniquely detailed understanding of how criminals can use cryptocurrency to their advantage and, more importantly, how they can’t: In a January confiscation decision, for example, Faruqi noted that “cash presents a bigger challenge to law enforcement than cryptocurrency in non-hosted wallets.” In another, he called blockchain anonymity a “myth,” clarifying that cryptocurrency is an ineffective tool for criminals to evade sanctions.

His knowledge is not a product of spending time on crypto Twitter. By contrast, before taking the judgeship, Faruqi was one of a group of prosecutors in the US Attorney’s office in Washington, D.C. who called themselves the “Bitcoin Strikeforce” and worked with agencies like the IRS and the FBI on federal investigations. There, Faruqi prosecuted cases related to terrorism, child pornography and weapons proliferation. In particular, the case of a dark web site called “Welcome to Video” facilitated the download of approximately 360,000 child sexual exploitation videos to 1.28 million users worldwide using bitcoins. Bitcoin’s immutable ledger has been used to track down criminals.

A magistrate does not set a precedent in the same way as

Oxford's Financial Edge: Easy Money Strategies In Forex Trading And Mining

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