Regardless of the benefits associated with cryptocurrencies and the blockchain technology, the Chinese government still believe they are used to conduct illicit activities,
In a local finance news outlet Eastmoney report today, the Office of the Leading Group for Special Remediation of Internet Financial Risks in Shenzhen has issued a strict warning to people who use cryptocurrencies to conduct illicit activities.
The report recalls a government move in 2017, to prevent financial fraud by issuing the “Announcement on Preventing the Risk of Subsidy Issuance Financing” regulation, to ban crypto exchanges, cryptocurrencies, fundraising in cryptos, and Initial Coin Offering (ICO) from being conducted in the country reduced illicit activities.
The regulators believe that these fraudulent activities will continue considering the rapid growth of blockchain and cryptocurrencies over the years.
According to Eastmoney, the authorities noted that they would conduct an investigation and collect evidence linked to fraudulent activities involving cryptocurrencies and punish offenders in accordance with the tenets of the “Risk of Subsidy Issuance of Financing” regulation.
Investors have also been urged to report any suspicious crypto-related activities to the relevant authorities to prevent any loss.
Roadmap to China’s Stance on Cryptocurrencies
It is no news that China is currently operating a stringent regulation for the crypto space in the country. Interests in cryptocurrencies in the country started in 2011 after a Chinese charity organization did a fundraiser in Bitcoin to assist earthquake victims in Lushan, Sichuan province.
The massive interest shown at the time forced the People’s Bank of China (PBoC) to make efforts toward regulating cryptos in 2013, by prohibiting financial institutions from dealing with cryptocurrencies.
Not satisfied with its effort toward regulating the crypto space, in 2017, the PBoC further banned all online crypto-related activities, forcing investors to use an over-the-counter method to purchase cryptos and stopping financial institution from providing financial services for exchanges.
However, recent reports about the Chinese government’s interest in the blockchain tech and subsequently developing a Central Bank Digital Currency (CBDC) had sparked fresh hopes that the country would revise its stance on the crypto industry.
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