Over the past week the Chinese government has made new moves to clamp down Crypto and ICO related activities. This article aims to provide a summary of what has happened.
We believe that the recent move has mainly been driven by the weakness in Yuan. CNHUSD has seen a sharp downward move since the beginning of the trade war. The government has failed to stablise the exchange rate. The biggest concern of the PRC government is the potential outflow of capital that could be caused by the weak exchange rate; something that we have seen two years ago when CNH took a plummet against the USD. Given convenience in using cryptocurrencies to move a large amount of capital across the border, we do expect to see a tighter control/scrutiny on crypto & ICO related activiteis in the near future.
Tencent Holdings, one of China’s biggest tech firms, has shut down a number of public accounts on its social app WeChat after they were alleged to have illegally raised funds through initial coin offerings and enabled virtual currency transactions. Authorities in Beijing have also called a halt to all activities promoting virtual currencies at venues across the capital.
Many popular accounts on WeChat distributing information on blockchain, such as Jinse Finance, Tokenclub, Bishijie and Huobi News, violated rules governing communication tools for public information services, Tencent said in a statement yesterday. Jinse Finance and Bishijie are still accessible via their WeChat mini-app.
In addition to the above, we understand that Tecent has also 1. restricted the payment function of these accounts; restricted the limit on how much fund could be received by these accounts; & 3. Live monitoring of daily active transactions and potential intervene/halt activities that are suspicious.
CBIRC, the banking and insurance sector regulator in China, along with 4 other government departments, including PBOC and the police department, issued a new notice warning the danger of ICO scams in China. It specifically mentioned that there are people who use cryptocurrency and/or cryptoasset as a means to raise fund and harm public interest. The regulators stated that these are not real blockchain technology but rather ponzi games. Warning the public to be aware of potential losses.
Source: https://finance.sina.com.cn/money/bank/bank_hydt/2018-08-24/doc-ihicsiaw3702981.shtml
Beijing’s central Chaoyang district issued a notice on August 17 banning hotels, office buildings and shopping malls in the area from hosting events promoting cryptocurrencies. The document was leaked online this week, and confirmed by the South China Morning Post with the local authority.
A staffer with Chaoyang’s financial authority said the notice was triggered by a local event organized by an overseas cryptocurrency exchange last week, and is restricted to the district in question.
