All trading platforms are requested to immediately stop promoting contract experience funds to college students

Recently, Brucexu.eth, co-founder of ETHPanda and LXDAO, revealed on social media that some kriptocurrency trading platforms are issuing so-called contract experience funds to college students. Such experience funds cannot be withdrawn directly, and once a profit is made, the income belongs to the students; if a loss occurs, there is no need to repay it, and additional incentives can be obtained by posting high profits on WeChat Moments.

From giving away the principal, to leveraging incentives, to social fission, this whole process is precisely targeting college students. This behavior is not essentially about popularizing contract knowledge or educating users, but a gambling inducement in the guise of financial enlightenment, precisely targeting college students with weak risk awareness and insufficient fund management capabilities.

Even though the current crypto trading platform as a whole is facing a bottleneck in user growth, this does not mean that college students can be used as a breakthrough point for business expansion. Such behavior not only poses compliance risks, but also has a long-term negative impact on the industrys image.

High-risk financial instruments should not target college students

After the combination of technology and finance, the precise guidance of young people is almost a global problem. Whether it is the structural design of the US student loan system that induces excessive borrowing, or the rampant usury targeting young people in Internet financial products in Indonesia, the Philippines and other countries, countless young people around the world are deeply trapped in debt.

In 2015, when Chinas mobile payment was just emerging, pre-consumerism was quietly spreading among young people. At the same time, a group of Internet financial companies represented by platforms such as Qufenqi, Fenqi Le, and Aiyoumi, under the banner of pre-consumption and credit growth, entered universities in a big way.

Qufenqi is the most representative player among them. It directly enters campuses through offline promotion teams, and organizes campus sales with mobile phone, computer and cosmetics merchants to attract college students to use its platform for installment consumption. With only an ID card and a student ID, you can get an iPhone for free with a monthly payment of less than 300 yuan.

However, this carnival of financial innovation soon showed its fangs. Problems such as opaque interest rates, high handling fees, and unreasonable repayment dates quickly pushed a large number of students into the debt trap of overspending. In order to repay their debts, many students were forced to borrow from one platform to pay another, and borrow money from different platforms.

Even worse, as debt collection becomes more difficult, some platforms or underground debt collection organizations have resorted to extreme oppression such as naked loan – requiring female college students to provide indecent photos as collateral and using this as a threat if they default. After this incident was exposed by the media, it shocked Chinese society.

From a moral perspective, this trend has completely broken through the bottom line of society. The once popular Qufenqi, even after trying to transform into an installment e-commerce platform and a B-side financial technology service provider, was still labeled as a campus loan initiator and encountered widespread boycott.

Qufenqi, later renamed Qudian, is an auto finance project launched in 2018, which aims to provide auto installment services to young people through the rent-to-buy method. It was also boycotted. In 2022, Luo Min, the founder of Qudian, announced his entry into the pre-prepared food market and promoted it through Douyin live broadcast and other methods. However, due to public doubts about its campus loan history, Chinese celebrities who cooperated with it, such as Jia Nailiang and Fu Shouer, have distanced themselves from it.

This is a memory of the times and also a painful lesson. There was no clear supervision at the time and no one stood up to stop it. It finally came to an end only when millions of families paid for it.

In todays cryptocurrency field, contract experience funds are openly promoted to college students, which seems to be the beginning of another disaster – it does not use usury, but a more covert and more difficult to detect gambling addiction cultivation.

The contract is not sinful, but greed should not extend to the campus

During this cycle, college students have become the protagonists of Web3 public opinion, and many projects and VCs tend to recruit diligent, studious and motivated college students as interns. Even crypto trading platforms have launched a campus ambassador new user acquisition program, where college students can apply to join and receive rebate rewards and employment qualifications by acquiring new valid users. However, this activity was stopped shortly after its launch amid community opposition, and the official interface for this activity is no longer available.

Nowadays, some trading platforms have gone even further and used contract coupons to lure college students into the business. Compared with the campus loans of the past, this times promotion of encrypted contracts has not even touched the basic regulatory red lines.

Many centralized trading platforms have servers located in various countries, disclaimers written in their user agreements, and employees located all over the world. They often do not accept full supervision from any country, but they operate globally, especially in countries and regions where financial education is not yet popular.

In such a vacuum, it is difficult for us to expect effective policy intervention in the short term. This means that the publics moral constraints and the collective actions of users are the most realistic and powerful regulatory means. Every user and every practitioner should not remain silent about the behavior of inducing college students to participate in contract transactions.

As a financial tool, the existence of contract trading is reasonable, but the scenarios must be distinguished. For example, the following three situations can be regarded as morally reasonable usage scenarios:

The first is risk hedging, which is the original design purpose of the contract. Institutions or mature investors use contracts to hedge against spot price fluctuations, such as miners locking in mining income and traders managing position risks. This is a professional means based on clear asset and risk strategies.

Instead, it is for small-position speculation and entertainment by independent and self-responsible adults. Some individual users may use a very small proportion of funds for short-term trading as a high-risk operation for entertainment purposes. This premise is that they have a certain risk awareness, a complete financial safety net, and are aware of the consequences they bear.

Finally, there are the gamblers who go both ways with the casino. This is the most common type of contract trading user at present. They do not hedge or analyze, and trade purely based on their feelings. Although this type of behavior is not encouraged, if adults clearly know that they are gambling, the transaction reached between the platform and them can be said to be willing to gamble and accept the loss.

But – college students are not gamblers.

They have not yet entered society and do not have enough income, risk awareness or financial literacy. They should have built their way of thinking on campus instead of being induced by the platform to build leverage logic. Any trading platform that extends its promotional tentacles to college students is doing something extremely bad.

Please take action and put pressure on CEX

Faced with such behavior of inducing college students to participate in high-risk contract transactions, the industry can no longer remain silent. This not only deviates from the original intention of financial technology inclusion, but also seriously damages the credibility of the entire crypto industry. Therefore, there must be clear and continuous social feedback to resist these behaviors of giving away experience money, encouraging showing off profits, and guiding leverage operations.

Therefore, we must voice our rejection and draw a bottom line with our actions:

We can boycott CEX on social platforms, refuse to register and top up on such platforms, and use the absence of real money to remind them that users are not ATMs;

We can – exert sustained public pressure on companies that still implement such market strategies;

We can encourage industry KOLs and media professionals to publicly expose and severely criticize such harvesting methods.

Only in this way can the platform be forced to realize that the lack of supervision does not mean the lack of morality, and the college student group should not become a breakthrough for the industry to attract new members. If the industry truly pursues long-term development, it should first abandon the growth method that destroys the future of a generation. This will not only fail to bring development to the industry and new highs to the price of encrypted assets, but will further stigmatize the industry, thereby hindering the process of global compliance of the entire industry, and deviating from the true vision of encryption.

This is not the first time that the industry has tested the bottom line in the gap of morality. Today it is college students’ experience money, tomorrow it may be “contract loans”, or tailor-made “small-amount high-frequency leverage recommendation system” for young people who are new to the cryptocurrency circle. There are always people designing traps for young people who have not yet established risk awareness.

If we don’t want to see the “naked loan” disaster happen again in the crypto world, if we don’t want to see young people being trained to be gamblers, we must take action from now on and resist this behavior. If the platform still turns a blind eye, we will join more KOLs and media to continue to expose it until all this is over.

This article is sourced from the internet: All trading platforms are requested to immediately stop promoting contract experience funds to college students

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