China is continuing its crackdown on bitcoin and cryptocurrency-related ventures. One of the leading countries in the cryptocurrency and blockchain arenas, the nation is now actively blocking access to more than 120 offshore cryptocurrency exchanges used by mainland clients.
In addition, officials are also working to halt websites regarding both cryptocurrencies and initial coin offerings (ICOs) and stop businesses from accepting payments in virtual money.
Why the Anti-Crypto Attitude?
ICOs were first banned in China last September and described as “unauthorized” and “illegal.” That same month, Chinese regulators requested that all cryptocurrency exchanges cease their respective trading practices, thereby bringing most trading to an end. This caused many ICO and cryptocurrency ventures to close their doors and move to the neighboring region of Singapore, which currently employs more crypto-friendly regulation.
Over the past 12 months, approximately 90 different cryptocurrency exchanges and 85 Chinese ICOs have been shut down. The yuan-bitcoin trading pair has also dropped from a whopping 90 percent to less than five percent of the world’s total bitcoin trades. Pan Gongsheng – who heads the Leading Group of Internet Financial Risks Remediation – says that stopping all cryptocurrency activity in China is the “right decision,” as digital assets cannot be trusted.
“If things were still the way they were at the beginning of the year, over 80 percent 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.”
Businesses Aren’t the Only Ones That Aren’t Safe…
China isn’t stopping short of crypto businesses. Officials are also seeking to block cryptocurrency-related news accounts on social media platforms. The country’s primary social network WeChat – which presently boasts over one billion users and is comparable to Facebook in the amount of data it holds – has reportedly blocked several blockchain and crypto accounts out of suspicion that they are promoting ICO-based activities. Some of the companies affected by WeChat’s actions include, Deephain, CoinDaily and Huobi News.
Now, a leading group of both financial and social risk prevention and control in China’s capital of Beijing is banning digital currency promotion. Recently, the organization sent a notice to all public retail outlets in the area – including hotels, guest houses, shopping malls and office buildings – to stop hosting all publicity and promotional activities that have anything to do with ICOs or cryptocurrency.
What Happened to the Change of Heart?
The news is particularly disheartening in that it comes right after President Xi Jinping induced a sense of optimism in Chinese crypto traders. Recently, Jinping called blockchain technology a “new industrial revolution” that had the power to benefit both individuals and government bodies alike.
Meanwhile, the neighboring region of South Korea – which like China, instilled a ban on ICOs and threatened to do the same with cryptocurrency exchanges – has vowed to build a more regulated atmosphere for cryptocurrency businesses and platform operators. Furthermore, officials are now saying that they will reevaluate their recent decision regarding ICO projects.
South Korea was once a prominent area for both bitcoin and cryptocurrency trades and ventures. It was estimated that approximately one-quarter of the world’s bitcoin trades took place there, while coins often sold considerably higher on South Korean exchanges than they did anywhere else due to their heightened popularity.
When Asia Changes, So Does the World
As regulations in Asia have become more strict, other areas of the globe have increased their leniency to “cash in” on the crypto business that Asia is losing. Malta, for example, is now home to several former exchanges originally housed in various countries of Asia, which have moved to experience less stringent crypto-related laws and legislation.