China’s Crackdown on Cryptocurrencies, ICO’s Remains Unchanged: PBOC Media

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The Chinese government has reiterated its stance on domestic cryptocurrency trading in the wake of local crackdowns by the Shanghai and Shenzhen municipal governments.

A figure from the Internet Finance Risk Specialist Rectification Team Leadership Office (互联网金融风险专项整治领导小组办公室) said to the Chinese central bank’s news publication that it had recently discovered certain organisations were engaging in illegal financing activities under the name of blockchain, and that “illegal elements” were using the “guise of blockchain” for promotional or advertising purposes.

“The policy redline hasn’t undergone any change at all,” said the source. “With regard to cryptocurrency and ICO activities, regulators will continue to strengthen clean up and rectification, and prevent their return from the ashes.”

Since the start of 2019 Chinese regulators have shut down six newly discovered cryptocurrency platforms, as well as 203 platforms for the processing of offshore cryptocurrency transactions, and nearly 10,000 cryptocurrency-related trading accounts on Alipay and WeChat Pay.

In November both the Shanghai and Shenzhen municipal governments launched their own local campaigns against trading exchanges as well as other illegal activities in relation to cryptocurrencies.

The Chinese central bank first cracked down on the Chi­nese cryp­tocur­rency sec­tor in Sep­tem­ber 2017, with the is­suance of the “Pub­lic No­tice Con­cern­ing the Pre­ven­tion of Cryp­tocur­rency Is­suance Fi­nan­cial Risk” (关于防范代币发行融资风险的公告). 

The No­tice pro­hib­ited in­di­vid­u­als and or­gan­i­sa­tions from en­gag­ing in ICO’s, called for the im­me­di­ate sus­pen­sion of all cryp­tocur­rency fi­nan­cial ac­tiv­i­ties, and for in­di­vid­u­als and or­gan­i­sa­tions that had raised funds via cryp­tocur­rency is­suance to make arrange­ments for re­pay­ments to in­vestors.

The No­tice also stated that “so-called cryp­tocur­rency fi­nanc­ing and trans­ac­tion plat­forms” are pro­hib­ited from en­gag­ing in trans­ac­tions in­volv­ing vir­tual cur­rency, the con­ver­sion of vir­tual cur­ren­cies into fiat money, and the pro­vi­sion of ser­vices in­clud­ing pric­ing and in­for­ma­tion in­ter­me­di­a­tion in re­la­tion to vir­tual cur­ren­cies.

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