The Shanghai Head Office of the People’s Bank of China has issued a regulatory update on cryptocurrency, following a week-long assessment of the crypto industry in the area that has led to the (alleged) closing down of the Binance Shanghai office…if it ever existed. The need for an update is reflective of the flourishing underground movement associated with crypto exchanges in the area in particular, following the supposed banning of all crypto-related activities in the country in 2017.
PBOC Shanghai Head office just made a new regulatory update as
“Strengthen regulation and control, clamp down cryptocurrency trading” pic.twitter.com/zL0BgOJBUF
— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) November 22, 2019
China to Investigate Crypto Entities at Home and Abroad
The regulatory update reiterates the PBoC’s stance on cryptocurrency vehicles such as ICOs, IEOs, and STOs, stating that they are, as one translated version had it, “all unauthorized illegal public offering and securities issuance, and potentially illegal fund-raising, financial fraud, pyramid schemes and other illegal crimes.” As well as investigating domestic cryptocurrency entities such as exchanges and other services, they will also seek to “further regulate trading platform whose servers are outside mainland but providing virtual currency trading services to domestic residents”, with a particular focus on fiat gateways. The use such strong language is typical of Chinese authorities in relation to crypto and is designed to give the impression that they are taking a zero-tolerance approach to such activities, while still allowing Bitcoin mining on an industrial scale.
We will be suing them.
— CZ Binance (@cz_binance) November 23, 2019
CZ to Sue The Block After ‘Raid’ Outrage?
It was announced last week that PBoC officials and Shenzhen financial regulators were launching twin investigations of crypto activity in the area in advance of the country’s central bank launching its own cryptocurrency. The PBoC said at the time that its aim was to crack down on a resurgence of illegal activities within the virtual currency sector, and had cautioned investors not to confuse such instruments with blockchain technology following Chinese president Xi Jinping’s public endorsement of blockchain at the end of October. One of the most high profile casualties of this crackdown appeared to be Binance, who allegedly had their Shanghai office raided by police and shuttered, something that CEO Changpeng Zhao vehemently denied, leading to a war of words with crypto news outlet The Block and ending with a threat of legal action on behalf of the exchange. Many commentators have stated that this latest update is another leg in China’s war to sweep away all and any crypto entities before they release their state-sanctioned cryptocurrency and blockchain.