China Blacklists Crypto OTC Trading Desks With A Five-Year Banking Ban As Punishment For Illegal Acts


  • PBoC blacklists crypto OTC traders in its latest efforts to crack down on money laundering.
  • This has caused several OTC trading desks to shut down as the future turns bleak.
  • The central bank set a three to five-year banking ban in the country as punishment.

Bitcoin over-the-counter (OTC) traders could be facing up to a five-year ban on their banking accounts in China, local reports state. The central bank, People’s Bank of China (PBoC), is heavily cracking down on money laundering activities and is blacklisting several OTC trading desks dealing in cryptocurrencies.

Recently, the Chinese central bank had enhanced its efforts in cracking down money laundering activities hence the latest move. In a bid to stop the illicit and illegal trades, the PBoC is taking a step affront to combat cryptocurrencies being used to launder funds by setting some of the OTC traders under its “disciplinary list.”

The first step in PBoC’s crackdown in the crypto ecosystem will target large OTC traders who trade in millions. According to the report, exchanges that allow transactions away from the public and transact high volumes will be blacklisted. Some have already faced the brunt, having their bank accounts and bank-issued cards blacklisted for the next three years and their online accounts banned for the next five years.

Local banks and financial institutions are now in charge of monitoring money laundering, bidding to keep the vice away at the lowest levels and higher levels of government. The institutions quickly flag and restrict the transactions involved in money laundering, and subsequently, the information is transferred to the local branch of the PBoC.

Once registered, the “blacklist” is transferred to other banks and local financial institutions across the country. This prevents the OTC dealers on the disciplinary list from opening and transferring funds to new accounts.

Despite the crackdown, regulations on cryptocurrency transactions within China remain slim – leaving a grey area on the crypto transactions by investors. Because there are no corresponding rules and regulations, “various financial institutions have different judgment standards for cryptocurrency transactions” hence some crypto OTC desks could be flagged by some local financial institutions.

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