The People’s Bank of China (PBOC) has signalled that it will maintain its crackdown on initial coin offerings (ICO’s) and the use of cryptocurrencies for financing purposes.
PBOC launched a blanket ban on ICO’s and use of cryptocurrencies for fund-raising purposes in September 2017, followed by a crackdown on domestic cryptocurrency trading platforms.
The move has had a dramatic impact on China’s position and influence with the global cryptocurrency sector.
“88 domestic cryptocurrency trading platforms and 85 ICO trading platforms have basically been removed without risk,” said Zhang Yifeng (张一锋), head of the Zhongchao Blockchain Technology Research Institute to Yicai.com. “Cryptocurrency transactions using the renminbi have fallen from over 90% of the global total, to under 1%.”
According to Zhang Beijing hopes to prevent wild fluctuations in cryptocurrencies or the emergence of a cryptocurrency bubble from having an adverse effect upon the Chinese economy.
The Chinese central bank is taking the lead in stepping up China’s crackdown on cryptocurrency financing with the launch of a slew of new measures including:
i) Blocking cryptocurrency trading platforms that have “emigrated” abroad.
As of May 2018 a total of 110 trading platforms had been shut or blocked in China, including Huobi (火币网) and Binance (币安网).
ii) Prevent the payments sector from abetting cryptocurrency trading activities.
PBOC has engaged in multiple discussions with non-banking sector payment entities such as Alipay and Tencent, requiring that they refrain from engaging in any business involving cryptocurrencies such as bitcoin.
Alipay has reportedly uncovered and closed approximately 3,000 accounts that engage in cryptocurrency transactions.
iii) “Firmly strike” against the emergence of ICO’s and other “deviations.”
PBOC will engage in close monitoring of China’s cryptocurrency sector as well as “strike early and strike the small,” in order to “send a clearer regulatory signal to the market.’
iv) Actively provide risk warnings and engage in the guidance of public discussion.
PBOC will work with the National Internet Finance Association of China (中国互联网金融协会) to use a range of channels to ensure that the general public is well-apprised of the risks and hazards involved in cryptocurrency trading.
v) Actively work with public security bureaus to “strike harshly” against any forms of illegal fund-raising, fraud or rumour-mongering involving cryptocurrencies.
According to official data China’s public security bureaus have investigated around 300 criminal cases involving cryptocurrencies in recent years.