China is poised to block over 120 foreign cryptocurrency exchanges as part of the government’s broader crackdown on activities related to digital money, according to state media.
Authorities will block access in China to 124 websites operated by offshore cryptocurrency exchanges that provide trading services to citizens on the mainland, the Shanghai Securities News, a newspaper affiliated with the country’s financial and markets regulators, reported on Thursday.
The move comes the same week as Beijing forbade venues including hotels, shopping malls, and offices from promoting or hosting events supporting cryptocurrency.
The report marks the latest effort by Beijing to intensify the clampdown on cryptocurrency activities because of concerns about financial instability.
It said authorities will also continue to monitor and shut down domestic websites related to cryptocurrency trades and initial coin offerings (ICOs), and ban payment services from accepting cryptocurrencies, including bitcoin. The newspaper cited people close to the Leading Group of Internet Financial Risks Remediation, which was set up by China’s cabinet in 2016 and headed by Pan Gongsheng, a deputy governor of the People’s Bank of China – the country’s central bank.
Censors recently shut down at least eight blockchain and cryptocurrency-focused online media outlets, some of which raised several million dollars in venture capital. These entities found their official public accounts on WeChat blocked on Tuesday evening, owing to violations against new regulations from China’s top internet watchdog.
Last September, Chinese regulators banned ICOs, describing them as an unauthorized illegal fundraising activity. During the same month, Chinese regulators also ordered Chinese cryptocurrency exchanges to cease trading.
The government crackdown prompted Chinese cryptocurrency exchange operators and ICO projects to move their operations in friendlier jurisdictions, such as Singapore.
In February, state media first reported that China will soon block all websites related to cryptocurrency trading and ICOs – including overseas platforms. Popular cryptocurrency exchanges, including Bitfinex, Bitnance, Huobi and OKEx, have since been blocked on the mainland.
Since the crackdown began last September, a total of 88 cryptocurrency exchanges and 85 ICO projects have been shut down in China, and the yuan-bitcoin trading pair has dropped from 90 per cent to less than 5 per cent of the world’s total bitcoin trades, according to Shanghai Securities News.
Pan, the central bank deputy governor, said in Beijing last December that China made the right decision to clamp down on cryptocurrency exchanges.
“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?” he said. “It’s really quite scary.”
In our opinion, China’s banning strategy has always been the same: ban foreign projects (e.g. Facebook, Google, eBay) to help domestic ones to thrive (e.g. Wechat, Alibaba, Baidu). We think that after implementing a regulatory framework, China will help domestic blockchain/crypto projects to reach the top.
Korean Cryptocurrency & Blockchain News tweeted: “From what I’ve gathered: Chaoyang is a very symbolic district, what’s considered as the “center of the core power”. Also, the propagation of narratives in the regulatory environment does not need an official nation-wide document in China, this already sets the tone.”
Malcolm Lerider, senior Research and Development Manager at NEO Blockchain responded as follows:
So, whether these measures have real effect or are FUD remains to be seen.
Sources: The Bitcoinist.com, South China Morning Post & Twitter.