China’s central bank has issued a new public notice, warning citizens of the dangers of cryptocurrency and ICO investing. Despite government crackdowns culminating in a blanket ban on all ICOs, the People’s Bank of China (PBoC) admits that cryptocurrency trading activity among domestic investors using offshore exchanges continues to thrive. The PBoC announced in today’s statement that it will continue to strengthen its attempted restriction on all illicit trading. Arguing that these restrictions are for the public good, the central bank points out that Chinese investors were effectively saved from the cryptocurrency bubble earlier this year thanks to government intervention.
“[T]he global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%, effectively avoiding the virtual currency bubble caused by skyrocketing global virtual currency prices in the second half of last year in China’s financial market. The impact has been highly recognized by the community,” the public notice reads.
As reported by the South China Morning Post, national authorities blocked more than 120 offshore cryptocurrency exchanges in August. Over 88 cryptocurrency exchanges and 85 ICO projects have been shut down in China since government crackdowns began last September. According to Shanghai Securities News, the yuan-Bitcoin trading pair has dropped from 90 to 5 percent of the world’s total Bitcoin trades.
Government authorities are now aimed at clamping down on trading through the offshore exchanges being used to circumvent the domestic blockade. The PBoC states that it will:
“closely monitor ICOs and its multiple variants, strengthen research and judgement, proactively fight and prevent concerns…In addition, [the internet authority] has also strengthened the disposal of domestic ICO and virtual currency transaction related websites, public numbers, social media etc., and permanently blocked some public numbers suspected of releasing ICO and virtual currency trading hype information.”
The PBoC also emphasized added efforts to “clean-up” payment channels and strengthen monitoring and inspection mechanisms. The public notice states that 3,000 accounts have been closed as a result of these efforts. An outline for silencing crypto “hype” material circling social media platforms was also given.
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In an effort to comply, large tech companies such as Baidu, Alipay’s Alibaba and WeChat’s Tencent have begun to double down on their efforts to monitor and ban accounts suspected of engaging in promotion of crypto and blockchain related activities.
The PBoC concluded Tuesday’s warning by stressing that domestic residents are required to report undetected ICO operations or variants of ICOs “suspected [of] illegal activity or illegal crimes.”
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