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China’s securities regulators suspect crypto resurgence amid blockchain push

Mon, 30 Dec 2019, 05:58 am UTC

Following the recent blockchain push in China spurred by President Xi Jinping, the country’s securities regulator is suspecting “serious violations” of the "Announcement on Preventing the Financing Risk of Tokens" made in 2017.

Seven regulators including the People’s Bank of China (PBoC) banned Initial Coin Offerings (ICOs) in September 2017 and started shutting down cryptocurrency exchanges operating in the country.

The China Securities Regulatory Commission (CSRC) issued a risk warning on Dec. 27 stating that “virtual currency trading activities are showing signs of resurgence in the country,” particularly highlighting crypto trading services, zero-interest loans, and digital currency mortgage provision, among others.

Signatories of the announcement include the Beijing Municipal Financial Supervision Administration, the Business Management Department of the PBoC, the Beijing Banking Insurance Regulatory Bureau, and the Beijing Securities Regulatory Bureau.

“[W]e seriously warn institutions and personnel in Beijing that carry out related activities shall not publicize and promote relevant virtual currency projects or platforms, do not conduct virtual currency business sales or transactions, do not engage in virtual currency transactions or disguised transactions with investors, and shall not engage in Acting on domestic and overseas virtual currency issuance and trading activities, financial institutions and non-bank payment institutions within its jurisdiction shall not provide services for any virtual currency transaction,” the regulators said (via online translation).

It can be recalled that the Shanghai headquarters of the PBoC also noted the “signs of virtual currency hype” in announcement last month and announced that it was strengthening crypto trading prevention and control efforts.

Meanwhile, the PBoC is reportedly planning to soon launch its digital currency pilot program. The digital currency, called the digital currency electronic payment (DCEP), will be tested in real world use cases with participation from seven state-owned companies.

Earlier this month, reports suggested that the CSRC was setting up a new Technology Regulatory Bureau and was planning to bring on board Yao Qian, the former head of the PBoC’s digital currency initiative, to lead the new bureau.

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