In 2017, China prohibited Initial Coin Offerings to be conducted within its borders. Shortly after, anything cryptocurrency was a no-go zone. Authorities kept clashing with the cryptocurrency community as they hoped to find an escape route.
A Rough Start In 2018
By the end of last year, the president of the Bitcoin Association in Hong Kong, Leonhard Weese had started noticing some abnormal behaviors from the authorities noting that:
“Authorities are more worried about the narrative, rather than what people actually do. Once it gets widely reported that Bitcoin trading is well and alive in China, the government will again try to put a lid on it.”
In 2018, Leonhard’s observations became real with the financial regulators freezing OTC trade accounts.
It was followed by a group within the Peoples Bank of China (PBoC) suggesting that bitcoin mining should be systematically abolished in the country because it is consuming a lot of resources and feeding speculation of cryptocurrencies.
The First Six Months Of 2018
On January 17, the central bank ordered that banks should close all payment channels involved with virtual currencies.
The ban on mining and OTC trading was later extended to encompass virtual currency exchanges. The Finance Association of China noted that the ban also prohibited trading on offshore cryptocurrency platforms.
To further tame the cryptocurrency community, cryptocurrency exchange accounts on social platforms were switched off.
In March 2018, the new PBoC governor discredited cryptocurrencies saying that crypto is not a ‘tool like paper money, coins or credit cards.’
The Government Issues More Regulations
In mid-August, authorities in Beijing’s Chaoyang district prohibited any commercial venue from holding cryptocurrency-themed events.
On the same day, more than 100 crypto platforms facilitating crypto trading using offshore IP addresses were named by the China National Fintech Risk Rectification (CNFRR) and marked for closure.
To further discourage crypto enthusiasts in the country, PBoC paraded statistics showing that bitcoin and other cryptocurrency trading has dramatically declined over time.
However, in September this year, the central bank published a white paper which Technode, a technology journal, noted that it was the first time the PBoC depicted cryptocurrencies as an investment option.
Even with such an extensive ban, cryptocurrency traders in China still access virtual currency platforms and ICOs.
For example, in the case of ICOs, the issuing firm is registered abroad but primary targets Chinese investors. Accessing offshore crypto exchange platforms using VPNs is proving hard for authorities to clamp down.
Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology.