China’s internet regulator to implement new rules for blockchain firms next month

The Cyberspace Administration of China (CAC) has approved new regulations for blockchain companies operating in the country.

In an online post dated January 10, the CAC said that the new regulations will go into effect on February 15, 2019.

The rules aim to encourage blockchain industry organizations to strengthen industry self-discipline and establish and improve industry standards. They also seek to guide blockchain information service providers to “improve the professional quality of the staff” and “promote the healthy and orderly development of the industry.”

“The blockchain information service provider shall implement the responsibility for information content security management, and establish and improve management systems such as user registration, information review, emergency response, and security protection,” the CAC said (via online translation).

Importantly, the regulations would require blockchain firms to censor content as applicable under the country’s laws. In addition, they would be required to keep a record of the content and users’ log information, which will be accessible by authorities when needed. The document states:

“For information content prohibited by laws and administrative regulations, they [blockchain information service providers] shall have immediate and emergency response capabilities for their release, recording, storage and dissemination. It should conform to the relevant national standards.”

“The blockchain information service provider shall record the content and log information of the blockchain information service users, and the record backup shall be kept for not less than six months, and shall be provided when the relevant law enforcement department inquires according to law.”

The service providers would also be required to verify the identity of their users via identity card number of mobile number, it added. They would not provide their services to users who do not perform real identity authentication.

Companies failing to comply with these regulations would be first given a warning, the CAC said. If the companies still don’t act, they could face a fine ranging from 5,000 yuan to 30,000 yuan.