China’s leading financial services corporation, UnionPay have issued a “letter on the prohibition of providing payment services for illegal transactions,” reinforcing their take on “illegal” payments by listing 25 virtual currency over-the-counter [OTC] transactions, reported Asiacryptotoday.
UnionPay, in the letter, urges prominent institutions like Wechat and Alipay to not provide services to illegal transactions in any form, instead do a good job in containing self-inspection and rectification, reported the publication. If such illegal transactions are found, they are required to immediately stop the service. The services considered to illegal include Internet sales lottery platform, token issuing financing, and virtual currency trading platform, to name a few.
UnionPay had already issued a lawyer’s letter to Wechat and Alipay, which required them to remove the relevant services and put an end to the illegal use of their trademark. They have received a warning in terms of crypto OTCs and this letter could be the final one.
This letter by the financial services corporation is in response to the “Announcement on Preventing the Risk of Subsidy Issuance Financing” issued in September 2017 that termed OTCs and other similar transactions as illegal. It further added that licensed payment agencies are restricted from providing trading services for virtual currency.
The publication reported that the Business Management Department of the People’s Bank of China issued the “Notice on Carrying out Self-inspection and Correction of Payment Services for Virtual Currency Transactions” that required payment institutions to hold self-inspection and rectification work, it had prohibited them to provide services for virtual currency transactions and to take effective measure, as per the reports. This may have been the final call for the payment channel companies.
Nevertheless, Bitcoin is a virtual commodity which can be freely traded, as per a notice issued by the People’s Bank of China and other five ministries in 2013 in order to prevent Bitcoin risk. According to the publication, in 2018 the General Principles of the Civil Law of the People’s Republic of China was implemented. In which, Chapter V of Article 127 of the Civil Rights stipulates: “If the law provides for the protection of data and virtual property of the network, it shall be in accordance with its provisions”, which is not giving away much.
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