Chinese Government Issues Warning Against Illegal Cryptocurrency Fundraising Activities

A coalition of Chinese regulatory bodies has issued a joint statement warning against illegal cryptocurrency trading and fundraising activities by “lawless elements” under the guise of “financial innovation” and “blockchain”.

Details of the Joint-Statement

The statement issued on Friday came from the Banking Regulatory Commission, the Central Cyberspace Affairs Commission, the Ministry of Public Security, the People’s Bank of China, the Securities Regulatory Commission, and the State Administration for Market Regulation.

The regulatory bodies warned against cryptocurrency projects using overseas IP addresses to solicit funds from Chinese residents. These projects also utilize social media, chat apps and celebrities to “endorse” them, spreading speculation to manipulate cryptocurrency prices.

The statement issued reads in part (roughly translated),

“Some individuals claim to have obtained investment quotas for overseas premium blockchain projects in the chat tool group, which can be used for investment, and is most likely a fraudulent activity.”

These projects claim to be based on blockchain technology but are in fact “the practice of speculative blockchain concepts for illegal fundraising, pyramid schemes, and fraud,” the statement added.

The statement also warned against other methods of fundraising such as Initial Exchange Offerings, Initial Fork Offerings and Initial Mine Offerings which are being used to lure residents to invest in digital tokens.

China’s War on Cryptocurrency Continues

This public warning is the latest in the Chinese government’s crackdown on cryptocurrency trading in the country. Starting with the ban on Initial Coin Offerings and exchanges in September of last year, the government has increased efforts this year with the prohibition placed on public cryptocurrency-related promotional activities in the Chaoyang District of Beijing.

Social Media and financial services providers are also cooperating with the government. As reported earlier, WeChat shut down the accounts of some crypto news media outlets on its platform.

Also, the government is moving to block the IP addresses of over 100 exchange platforms. According to Shanghai Securities News, the China National Fintech Risk Rectification Office has identified the foreign IP addresses being used by 124 trading platforms that are still available to domestic investors. In the same publication, it was reported that the regulator would move to shut down domestic cryptocurrency trading websites and any social media accounts that provide support for ICO projects.

Disclaimer: Parts of this article were roughly translated from Chinese.

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