China’s relationship with the cryptocurrency world has always had its fair share of problems. So, when the Chinese Central Bank issued a stern warning to Bitcoin exchanges, crypto enthusiasts thought nothing of it. Eventually, the Chinese government followed up on its threats with the September ICO ban that aided the downturn of the crypto market.
At the time, an online forum by the name Zhishi Xingqiu rose in popularity as it enabled ICO agents outside of China to access retail crypto investors in the country. Since the forum offered a fee for its services, its activities did not go unnoticed and the platform’s owners issued a warning saying that they would monitor threads and ban those soliciting investors for their ICO projects.
“We Will Crush Them”
Now, the Vice Governor for the People’s Bank of China (PBoC) has issued a much stronger warning to ICOs that are still actively marketing their projects to Chinese investors. While speaking at an internal meeting with the Internet Finance Rectification Working Group, Pan Gongsheng was quick to show how he was “disgusted” by ICOs and crypto projects that are illegally raising funds through the sale of illicit securities.
According to Pan, after the September 2017 ban, most of the projects moved overseas but are still making attempts to reach out to the Chinese market. In a quote on CoinDesk, Pan pointed out:
Any new financial product or phenomenon that is not authorized under the existing legal framework, we will crush them as soon as they dare to surface
A Working Plan
During the meeting and according to the First Financial Journal reporter, a special plan for the rectification of internet financial risks was formulated, with the leadership group set to develop corresponding work plans that will remedy the condition.
Authorized in 2016 by the China State Council, the working group is set to execute financial regulation and control of illegal activities in the internet finance space. The plan further illustrated its strategies to curb access to foreign ICOs and crypto trading platforms. The working group hopes to establish a long-term regulatory mechanism that will simultaneously construct a long-term internet financial supervision with clear requirements.
However, the report did not clearly give details of how it would stop trading of cryptocurrencies on foreign exchanges. Following reports about the meeting, WeChat’s move to increase efforts to spot crypto traders on its platform, was next. As one of the biggest social media platforms in the country, WeChat demonstrated support for the move by the PBoC. Furthermore, the report also suggested that WeChat and other messaging services should restrict payment functions for users identified to be involved in ICO and crypto trading activities.
What are your thoughts on PBoC’s move? Share your opinions with us in the comments section.