Chinese Central Bank Shuts Down Beijing Company for Abetting Cryptocurrency Trades

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The Chinese central bank is further stepping up its crackdown on domestic cryptocurrency trading, with the People’s Bank of China (PBOC) shutting down a company in Beijing on the grounds that it was providing cryptocurrency-related services.

On 6 July PBOC announced that it had shut down Beijing Qudao Wenhua Fazhan Co., Ltd. (北京取道文化发展有限公司) as well as closed the website it operated, following allegations that the company had provided software services for cryptocurrency transactions.

PBOC said that the move was for the purpose of “preventing and controlling cryptocurrency trading and speculative risk, and protecting the asset security of members of the public.”

“We hereby solemnly warn relevant institutions that they are not permitted to provide operating sites, commercial displays, sales promotions, fee payment channels or other services for virtual currency-related operations,” said PBOC.

“Financial institutions and payments organisations are not permitted to directly or indirectly provide virtual currency-related services to customers.”

PBOC also warned Chinese consumers that they should “strengthen risk awareness and establish correct investment concepts.” The authority said that investors should not “participate in cryptocurrency trading and speculative activity, or blindly follow the crowd to engage in speculative activity.”

The move comes just after PBOC summoned a number of Chinese banks and payments platforms for discussions concerning speculative trading in cryptocurrencies such as Bitcoin in the second half of June.

These banks included Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), China Construction Bank (CCB), Postal Savings Bank of China (PSBC), Industrial Bank Co., Ltd. and Alipay.

In April 2020 National Internet Finance Association of China (NIFA) issued a warning against flouting the ban placed on cryptocurrency trading within China by pursuing trading and investment activities via offshore platforms.

According to that warning a number of Chinese cryptocurrency trading platforms had registered or shifted their servers overseas in order to flout domestic regulation and continue their business activities.

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