Bitcoin, Regulations

Internet police crack down on crypto trading activities in China

According to China’s business news outlet The First Financial News, China’s Public Information Network Security Supervision (Internet police) agency under the Ministry of Public Security, has been closely monitoring domestic and foreign websites dealing with virtual currency such as bitcoin to prevent illegal activities such as money laundering, pyramid schemes and investment fraud.

Although seven ministries of Chinese government released the “Notice on Preventing Financing Risks of Token Issuance” in September last year, the government banned all  ICO (Initial Coin Issue) activities and subsequently closed down all virtual currency exchanges in China, including Bitcoin within the virtual currency industry. However underground trading activities are still active.

Since last September, the Internet monitoring authority began to pay close attention to the trend of the domestic trading platform. Although some of the platforms were moved offshore, they still monitored them synchronously.

Some Chinese media recently reported that the Chinese regulators will take further regulatory measures for Bitcoin transactions, mainly for those who allow domestic investors in foreign exchange digital currency trading platform.
Reported that China’s regulatory authorities found that some domestic enterprises and individuals evade the regulation of China’s virtual currency transactions by setting up exchanges abroad, moving servers to Japan and Hong Kong or registering companies abroad.  To this end, Chinese regulators will conduct a review of domestic bank accounts and online payment accounts for businesses and individuals suspected of helping domestic investors to make digital currency transactions at overseas exchanges.Xinhua News Agency reported on February 4 that after the regulation halted ICO, many domestic people turned to overseas platform websites to continue to participate in virtual currency transactions. Considering that domestic investors turned to offshore platforms to participate in transactions and face various risks, a series of regulatory measures will be taken.

The report also said that in the next step, the Chinese government will adopt a series of regulatory measures including banning related commercial presences and banning and disposing of domestic and foreign virtual currency exchange websites, so as to prevent financial risks and maintain financial stability.

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