China’s Crackdown on Crypto Rears its Head as BTC Gets “Over-Extended” & PBoC Focuses on DCEP
As China accelerates its digital yuan development, it is taking steps to tighten its control on the cryptocurrency market.
In 2017, during the bull market, the reports came of China banning virtual currencies on domestic cryptocurrency exchanges but permit over-the-counter transactions.
Now, as BTC enjoys a bullish market structure, currently around $13,750, China is further taking more steps towards regulating the market.
The platform, however, maintains that the founder has been assisting in a separate investigation.
According to the latest local reports, another exchange, the biggest one this time, Huobi is facing a similar issue; its COO Zhu Jiawei being under police investigation. They have reportedly been planning in advance after the OKEx incident and are not expected to halt withdrawals.
The exchange Huobi Global took to Twitter to deny the “rumors” of the arrest of a senior executive by local officials and that they are, in fact, “Operating Normally.”
Amidst this, as we reported, the Securities and Futures Commission (SFC) of Hong Kong is planning to propose a new licensing regime under which retail investors are banned from trading virtual currencies.
Additionally, all the crypto platforms operating in the city and overseas ones targeting local investors, are required to obtain a license to protect investors and combat money laundering.
There are also reports that buying and selling crypto may violate foreign exchange control and anti-money laundering laws. Those making profits from their crypto investments failing to pay income tax could also be suspected of tax evasions.
“The timing of the Chinese OTC and exchange crackdowns is no coincidence. The PRC government is sending a strong message about its stance on cryptocurrencies other than the DCEP,” said an executive at the crypto fund The Spartan Group.
However, China’s stance on crypto isn’t anything new, “It just rears its head every now and then,” he said, adding: “BTC was getting over-extended from a short term technical standpoint anyway so this event likely triggers some profit-taking.”