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Why do you need to lock up when applying for digital currency?

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Why do you need to lock up when applying for digital currency? Applying for dig

Why do you need to lock up when applying for digital currency?

Why do you need to lock up when applying for digital currency? Applying for digital currency allows you to store the digital assets in your own wallet when purchasing. This can help avoid many risks.

The applied digital assets are generated through smart contracts. When someone wants to make a proxy investment, it will automatically provide tokens to users and pay the corresponding commission. Then these people will receive corresponding returns (if unsatisfied), and they can participate in the development of the project. So how to achieve the purpose of proxy investment? To facilitate everyone’s understanding, let’s briefly introduce what locked tokens are. Locked digital assets represent a specific investment tool or the value held by a certain protocol. The ways to lock digital assets include putting digital funds into wallets or exchanges and exchanging through the assets in the wallet. After being locked, this digital asset will be directly transferred to the designated account, eliminating the difficulty of user operations and ensuring the safety and convenience of transactions. The longer the lock-up period, the higher the investor’s rights. Therefore, for the purchase of tokens, it is essential to choose products that are suitable for one’s financial management and meet personal needs. For example, there is a product that uses the lock-up period to buy stocks or fund shares of a project party. In this case, your company needs to prepare in advance for listing plans, issue new dividends, and invest a certain amount of time and resources to complete its IPO, while avoiding a significant drop in stock prices of any company that will affect the normal operation of the entire project. The longer the lock-up period, the more vigilant your team should be about its performance.

The longer the lock-up period, the greater the market volatility and opportunities. However, a short lock-up period indicates more potential risks. Therefore, to avoid the above reasons, the following work needs to be done first:

(1) First, seek advice from lawyers specializing in private equity related businesses and register a trust company through legal means; (2) Second, apply for blockchain industry-related patents; (3) Third, submit blockchain patent applications in accordance with the requirements of the Securities Law.

Is there a freezing period for applying for digital currency?

In a recent interview, Chen Xiaohong, associate professor at Shanghai Jiao Tong University’s School of Finance and doctoral supervisor, said, “I have discussed the issue of digital currency with many friends. They said that applying is a transaction of virtual commodities, and the freezing period is determined by legal regulations.”

He also mentioned the “Regulations on the Prohibition of Illegal Fundraising through Issuance and Trading”, which is due to China adopting a regulatory approach to crack down on illegal public financing activities such as ICOs. “If the business is not conducted in accordance with the requirements, we can restrict it according to national regulations, such as suspending ICOs.”

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