According to Shanghai Securities News, a newspaper closely linked with financial regulators of the country, a large number of virtual currency exchanges will likely lose their Chinese customers in the near future. The crackdown is part of the broader digital asset agenda by the ruling Communist Party.
China National Fintech Risk Rectification Office, the country’s crypto watchdog, has been established in 2016, with the aim of protecting citizens against risks associated with digital currency trading. The government agency has so far identified a total of 124 crypto exchanges with foreign IP addresses that are still available in the country. However, they will not be available in China for much longer.
Chinese Central Bank has placed a ban on initial coin offerings (ICOs) back in last September, labeling them as an unauthorized illegal fundraising activity, effectively ruling out crypto trading as well. As a result, domestic exchanges have been forced to relocate their businesses overseas, with many choosing crypto-friendly South Korea and Singapore.
The authorities have also been known to ban services from accepting cryptocurrencies as a payment method. Coindesk reports that at the moment access to the major crypto exchanges in China, such as Binance, OKEx or Bitfinex, appears to be restricted.
Censors within the country have recently intensified their efforts to shackle Chinese crypto aficionados, with government agents shutting down 8 crypto-focused online news outlets. The media companies found their official WeChat accounts banned on Tuesday, as they were deemed to be incompatible with the new regulations. The report warned that any domestic website or WeChat account suspected of providing crypto trading and ICO services will be permanently shut down.
Shanghai Securities News reported that since the start of the crypto crackdown 88 crypto exchanges and 85 ICO projects have been shut down in China. Prior to the introduction of such drastic measures, the yuan-bitcoin trading pair has accounted for 90 percent of the world’s total bitcoin trade. The figure has since plummeted to less than 5 percent.
Nonetheless, Pan Gongsheng, a deputy governor of the People’s Bank of China, believes China made the right choice by abolishing digital currencies, as he claimed that, “If things were still the way they were at the beginning of the year, over 80 per cent of the world’s bitcoin trading and ICO financing would take place in China – what would things look like today? It’s really quite scary.”
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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.