China widens its crypto crackdown
China delivers a tough blow to the crypto industry, banning all crypto transactions, including services provided by off-shore exchanges.
Ten agencies, including the central bank, financial, securities and foreign exchange regulators, issued a blanket ban against crypto trading for its association with money laundering, fraud and excessive energy usage due to mining.
The People’s Bank of China (PBOC), revealed that the government will “resolutely clamp down on virtual currency speculation … to safeguard people’s properties and maintain economic, financial and social order.”
PWC’s crypto leader and partner Henri Arslanian commented, “While this is not a surprise as China has ‘banned’ crypto many times in the past, this time there is no ambiguity. Crypto transactions and crypto services of all kind are banned in China. No room for discussion. No grey area.”
Amid the crackdown many cryptocurrency exchanges and providers of crypto services have begun to move out of China with the crypto asset management platform Cobo, recently relocating from Beijing to Singapore. Two of the world’s largest exchanges, Huobi and Binance has scrambled to severe ties to Chinese clients, stopping new registrations of accounts by mainland customers. Huobi also said it would clean up existing ones by the end of the year but did not disclose how many of its users would be affected.
Huobi Group co-founder Du Jun said in a statement to Reuters, “On the very day we saw the notice, we started to take corrective measures.”
TokenPocket, a popular service provider of crypto wallets, has also notified its mainland Chinese clients that it would be terminating its services and would “activiely embrace” regulation.
Speaking on the matter Ganesh Viswanath Natraj, an assistant professor of finance at Warwick Business School commented, “China’s ban on all cryptocurrency trading activity will have some short-term impact on the currency’s valuation, but long-term implications are likely to be muted.”
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