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Chinese Central Bank Plans to Nip Young Crypto Businesses 'In the Bud'
China's central bank has formally issued a new plan to crack down on crypto businesses.
By David Pan
Updated Sep 13, 2021, 11:43 a.m. Published Nov 22, 2019, 7:15 p.m.
China’s central bank has launched a new campaign to crack down on crypto trading in Shanghai on Friday, after speculation about softer regulations surged in the sector.
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The official announcement came one week after CoinDesk reported a leaked notice that detailed an inspection plan for crypto-trading operations in each district of Shanghai.
“If investors see activities and operations related to virtual currencies in any form, they can report to authorities,” the bank said in today’s announcement, stressing the distinction between blockchain technologies and virtual currencies.
The bank, joined by other local financial authorities, including the Shanghai Internet Finance Rectification Agency, plans to monitor crypto-related activities continuously and “nip the small and early-stage businesses in the bud” to protect investors.
Investors should also report any individual or organization that uses foreign services to trade virtual currencies or launch initial coin offerings (ICOs), the bank said.
The bank also listed some of the most common “fraught” crypto activities ranging from initial futures offerings, initial exchange offerings, initial mainnet offerings, security token offerings and ICOs.
In the previously leaked notice, the regulators in each district of the city were required to search and inspect crypto exchange related services before Nov. 22, or ICOs via a blockchain.
“Promotional and brokerage services inside China for ICO projects that are registered outside of the country also fall under the inspection scope of the local financial regulators,” the notice said.
China’s central bank rolled out a nationwide crackdown on crypto trading and ICOs for the first time in September 2017, fearing cryptocurrencies would disrupt its financial market.
The authority has recently relaunched the campaign in a few cities, including Shenzhen and Beijing, concerning the rise of crypto-related frauds after Chinese president Xi’s praise for blockchain technologies.
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