China Strikes Anew, Issues Another Risk Warning & Cracks Down on Crypto Trading
- Shenzhen law enforcement identifies 39 cryptocurrency companies involved in illegal activities
- Investors are not to mix the blockchain technology with virtual currency as speculation rises
- Amidst this crackdown, Bitcoin price has lost over 15% of its value, falling to $6,929
China is cracking down on cryptocurrency trading venues yet again.
The People’s Bank of China's Shanghai Head Office has issued a risk warning and is taking steps to prevent illegal activities related to “virtual currency”, as per the notice posted on its website on Nov 22.
It points out how there has been a rise in virtual currency speculation caused by the promotion of blockchain technology. Speculations related to virtual currency involving ICO, IFO, IEO, IMO, and STO have refurbished as prices skyrocket. The document reads,
“Relevant financing entities through the illegal sale, circulation of tokens, raising funds to investors or bitcoin, Ethereum and other virtual currency, which is essentially unauthorized illegal public financing, suspected of illegal sale of tokens, illegal issuance of securities and illegal fund-raising, financial fraud, pyramid schemes, and other illegal crimes have seriously disrupted the economic and financial order.”
Now, to further strengthen the prevention and control efforts, the Shanghai Financial Stability Joint Conference Office, the Shanghai Headquarters of the People's Bank of China and the relevant departments at the Shanghai Municipal Level in a joint effort are cracking down on virtual currency-related activities in the region.
The relevant authorities will continue to monitor the virtual currency business activities and on the discovery, will be “disposed of immediately.”
It also advises investors to be careful to not mix the blockchain technology with virtual currency.
According to media channel Sohu.com, Shenzhen law enforcement has identified 39 cryptocurrency companies suspected of carrying out illegal activities of virtual currency.
It further reported that the joint effort of the authorities will focus on three activities. As per the loose translation, these activities involve providing virtual currency trading services or opening virtual currency trading places in China, providing service channels for overseas virtual currency trading places including services drainage and agency trading, and selling tokens in various names and raise funds for investors or virtual currencies such as Bitcoin and Ethereum.
These are subsequent steps to the ones made on Sept. 4, 2017, that cleared up the ICO and virtual currency trading venues. Then in Oct. 2017, the authorities maintained a “high-pressure” situation and adopted measures to inspect and ban the entities involved in virtual currency activities.
Amidst the Chinese authorities’ ramping up their efforts to curb down on illegal virtual currency trading activities, Bitcoin has lost more than 15% of its value in two days. Currently, BTC/USD is trading at $7,125, after falling to $6,929.