Financial authorities in the southern Chinese tech hub of Shenzhen have issued a stern warning on the economic risks posed by speculation in cryptocurrencies.
On 22 June the Shenzhen financial authority issued the “Risk Warning on Further Prevention of Illegal Cryptocurrency Activities” (关于进一步防范“虚拟货币”非法活动的风险提).
“Cryptocurrency speculative activities severely threaten the asset security of the general public,” said the warning. “They lead to the proliferation of illegal criminal activities including gambling, illegal fund-raising, fraud and money-laundering, and disrupt the economic and financial order.
“Investors are in general reminded to maintain vigilance against these illegal financial activities, and to take care against being defrauded.”
The warning from the Shenzhen authorities comes amidst a dismal rout for global cryptocurrency markets, with Bitcoin struggling to remain about the USD$20,000 threshold after sinking nearly 70% compared to its peak value. Cryptocurrency exchanges and trading have been rigorously suppressed in China since September 2017.
In 2021 the People’s Bank of China (PBOC) led the release of the “Notice on Further Prevention and Disposal of Cryptocurrency Speculative Transaction Risk” (关于进一步防范和处置虚拟货币交易炒作风险的通知).
The Notice stipulated that “cryptocurrencies do not possess equal legal status with statutory currencies, and activities in relation to cryptocurrencies are categorised as illegal financial activity.”