China has been on a constant uphill struggle to dissuade its citizens from participating in cryptocurrency trade, albeit with little success. However, its regulators are now taking this a notch higher if the recent move to block 124 foreign crypto exchanges is anything to go by.
On Thursday 23rd August 2018, the Shanghai Securities Times, known as the Chinese financial authorities’ voice, reported that the China National Fintech Risk Rectification Office has picked out the trading platforms. They believe:
In recent years, speculative speculation related to virtual currency has prevailed, prices have skyrocketed, and risks have gathered rapidly, seriously disrupting economic, financial and social order. The main body of ICO financing is mixed, and the financing operation is suspected of illegally issuing securities, illegal fund-raising, financial fraud, pyramid schemes and other illegal and criminal activities.
They exchanges were identified courtesy of their overseas IP addresses, but still operating in the country. According to the report, the office is in plans to improve its efforts in terms of monitoring the space and blocking internet access to any of these exchanges.
This move comes off the back of an announcement in September 2017 by the People’s Bank of China that banned initial coin offerings (ICOs) and subsequently crypto trading platforms within its borders. This had led to most of the major exchanges operating in China at that time to move overseas – and rightly so.
A real crackdown in China
According to the report released today, the agency is also looking to permanently shut down the official accounts and domestic websites belonging to WeChat messaging app in case it is found to be offering ICO services and crypto trading. Furthermore, the agency has gone a step higher to collaborate with third-party payment vendors. These are expected to perform sufficient scrutiny and halt any accounts suspected to be dealing in cryptocurrency transactions.
The news comes just two days after a crackdown and subsequent ban on various Chinese cryptocurrency media outlets operating on WeChat. According to Tencent, the WeChat owner, the ban was instigated courtesy of the accounts providing ICO services and crypto trading. In fact, some of them faced permanent closure.
Whether this latest move will finally derail Chinese Citizens from trading cryptocurrency is only a matter of ‘wait and see’. It would be notable that most of the die-hard investors have been working with major technology companies to bypass these restrictions through VPNs and other tech-savvy means. Since the Chinese regulators have also been tracking down these efforts, this could be a defining moment for cryptocurrency trade in China.