The Chinese central bank will nip young crypto trading in the bud. It has come up with a campaign to stop the crypto-based business in Shanghai. China’s Central Bank to stop the new Crypto Business before it begins.
The bank highlighted the difference between virtual currency and Blockchain technology stating:
“If investors see activities and operations related to virtual currencies in any form, they can report to authorities.”
By monitoring the undertakings of all crypto businesses, the bank, together with other local financial authorities, such as the Shanghai Internet Finance Rectification Agency, plan to protect investors and “nip the small and early-stage businesses in the bud”. They have decided to keep a continuous watch on cryptocurrency-based activities.
The bank added that investors should identify the entities that make use of external services for virtual currency trading or ICO launches.
The bank further listed the common “fraught” crypto-related services that include the following:
- Initial futures offerings
- Initial mainnet offerings
- Initial exchange offerings
- Initial coin offerings
- Security token offerings
A previously leaked notice said:
“Promotional and brokerage services inside China for ICO projects that are registered outside of the country also fall under the inspection scope of the local financial regulators.”
In 2017, for the first time, the bank had brought in a national abolition of Initial Coin Offerings and crypto-based trading. It took these steps as it feared crypto activities would distort the financial market.
Recently, the organization reintroduced the campaign in the cities of Beijing and Shenzhen, as well as a few others. After Chinese President Xi’s praise for blockchain technologies, there was a rise in crypto-related frauds, which was the impetus for the relaunch.