China’s Banking Regulator Issues Risk Warning on Cryptocurrency Fraud


The China Banking and Insurance Regulatory Commission (CBIRC) has issued a risk warning about on use of certain key terms in relation to the blockchain and cryptocurrencies to engage in fraudulent activities or illegal fund-raising.

According to CBIRC “criminal elements have used the guise of ‘financial innovation’ and ‘blockchains’ to collect funds via methods including the issuance of so called ‘virtual currencies’ and ‘virtual assets.’

“These activities are not at all truly based on blockchain technology, but are in fact forms of illegal fund-raising or fraud that drum up the concept of the blockchain.”

The risk warning called for  investors to be wary of any cross-border online transactions, given that “certain illegal elements have established websites via offshore servers, and in actuality undertake activities directed at domestic residents.

“Certain individuals who use chat groups to claim that they have obtained high-quality offshore blockchain investment quotas are very likely engaging in forms of fraudulent activity.”

CBIRC also warned against “criminal elements using backdoor manipulation of the price trends of so-called cryptocurrencies,” as well as “the use of ICO, IFO, IEO and myriad other terms to issue tokens, or use of the IMO method to engage in cryptocurrency speculation under the guise of the sharing economy.”

The issuance of the risk warning arrives just following the closure of a slew of cryptocurrency-related accounts on Tencent’s WeChat social media platform, as well as reports that Beijing plans to step up its scrutiny of cryptocurrency-related activity within China.

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