Regulation

China to ban 124 offshore cryptocurrency exchanges in continued crackdown

c:istock.com/[yipengge]

China is readying to block 124 offshore cryptocurrency exchanges still available to domestic users as part of the government’s wider crackdown on activities related to digital money, according to the country’s state media.

The Chinese financial authorities affiliate news site Shanghai Securities News (SSN) reported that the government will block access to websites operated by foreign cryptocurrency exchanges that provide trading service to Chinese citizens.

The People’s Bank of China announced a rule banning ICOs in the country in September 2017, which led to the country’s major exchanges moving their companies overseas.

Authorities will reportedly continue to monitor and shut down domestic websites related to digital currency trading and initial coin offerings (ICOs), while banning payment services from accepting all cryptocurrencies.

A translated excerpt from SSN read:

In recent years, speculative speculation related to virtual currency has prevailed, prices have skyrocketed, and risks have gathered rapidly, seriously disrupting economic, financial and social order. The main body of ICO financing is mixed, and the financing operation is suspected of illegally issuing securities, illegal fundraising, financial fraud, pyramid schemes and other illegal and criminal activities.

In order to maintain financial stability, the People’s Bank of China began to work with multiple departments last year. Under the framework of the special rectification of Internet financial risks, the local government was instructed to clean up and rectify virtual currency trading venues and ICO activities, and the “Announcement on Preventing the Risk of Subsidy Issuance Financing” was issued.

The latest development follows just days after China officially banned all cryptocurrency-related activities.

That measures included an order to local authorities and police in Beijing to ban hotels, shopping malls and offices from hosting cryptocurrency-related promotional events, while the country’s most popular messaging app WeChat was asked to shut down the accounts of several blockchain and crypto-related news outlets.

WeChat’s parent company confirmed the order as a permanent shutdown of news outlets and accounts that are “suspected of publishing information related to ICOs [initial coin offerings] and speculations on cryptocurrency trading.”

The moves to effectively blanket-ban any cryptocurrency-related activity among individuals and businesses within the country, including within communications, comes in conflict to China’s relatively progressive stance on blockchain technology.

In May this year, a member of the People’s Bank of China expressed that control of currency issuance should remain with the government and blockchain technology must remain separate from finance.

Following China’s state-owned TV reporting that blockchain could have an impact ‘12 times larger than the internet’, the government later made the decision to allocate a minimum of $3bn to fund emerging blockchain projects and startups for the rapid development and deployment of the technology.  

 

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