China declares all cryptocurrency-related activities illegal; warns investors

On September 24, China’s central bank called digital currency activities illegal and pledged to crack down on the entire market. CNBC cited questions and answers posted on its website to state that the People’s Bank of China (PBOC) said that services that offer trading, order matching, token issuance and derivatives for currencies virtual devices are strictly prohibited. The PBOC also reportedly said that foreign crypto exchanges providing services in mainland China are also considered illegal.

According to CNBC’s translation of the comments posted on the website, the PBOC said, “China’s central bank declares all cryptocurrency-related activities illegal, promises severe crackdown.” Meanwhile, he added that workers at foreign crypto exchanges will be under investigation by authorities.

The PBOC said it had also upgraded its systems to strengthen oversight of crypto-related transactions and eliminate speculative investments. Reiterating its previous comments, the bank reportedly said: “Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies.”

Meanwhile, according to data from CoinMetrics, the price of bitcoin has fallen more than 3% on a 24-hour basis with the last exchange around $ 42,239. Ethereum, considered the second largest digital asset, fell 7% to $ 2,860. Stocks that have massive crypto exposure also plunged into pre-market trading with Coinbase down almost 4%, MicroStrategy down 5% and Riot Blockchain down more than 6%.

China bans crypto trading in May

On May 18, China announced that the country’s financial institutions and payment companies had been banned from providing services related to cryptocurrency transactions and even warned investors against speculative cryptocurrency trading. The crackdown by Chinese authorities earlier this year, according to a Forbes report, is in light of recent market volatility. It also marks another blow to the emerging market reeling from one of its biggest sales since soaring institutional adoption peaked during the COVID-19 pandemic.

Under the ban, Chinese financial institutions are not allowed to offer their customers any service involving cryptocurrencies. The three Chinese industry bodies said in a joint statement on Tuesday: “Recently, cryptocurrency prices have soared and fallen, and speculative cryptocurrency trading has rebounded, seriously undermining the security of people’s assets. people and disrupting the normal economic and financial order. Judging by current judicial practice in my country, virtual currency transaction contracts are not protected by law, “he added.

China suspends cryptocurrency-linked accounts

Meanwhile, Chinese cryptocurrency-related social media accounts were blocked over the weekend by Sina Weibo, the Global Times reported on June 6. system comprising Trader Xiaoxia, Fat Nerds Bitcoin, Super Bitcoin and Blockchain William. Some of the banned account holders are reported to be billionaires due to cryptocurrency investments.

The latest decision of the weekend came as China continues to scrutinize the digital currency industry to prevent what it calls systematic financial risks as well as illegal activity, including money laundering. According to the report, the suspension of cryptocurrency-related accounts was apparently piled up by Sina Weibo, Chinese social media platforms. Apparently, when searching for these accounts on the platform, Sina Weibo shows that they are blocked because they are believed to have violated the applicable laws and regulations regarding the platform’s community conventions.

Image: Unsplash / Representative

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