UnionPay Issues Letter on Wechat and Alipay Restricting OTC Bitcoin and Crypto Transactions in China
A leading financial service corporation in China, Union Pay, has prohibited at least 25 virtual currencies over the counter transactions (OTC). According to Asia Crypto Today, the leading crypto news website in Korea, China, and Japan, UnionPay has issued a ban on the provision of payment services for illegal transactions. The transactions include but not limited to, token issuing financing, internet sales lottery platform, and virtual currency trading platform.
In the letter, platforms like Wechat and Alipay have been asked to refrain from using the UnionPay trademark for unlawful transactions. These two firms had previously received similar warnings from UnionPay and this recent letter could be the final notice. The companies have also been asked to do a self-inspection, identify, and avoid any transactions that may be considered illegal.
In an interview with Securities Daily News, one of the key players in the industry, Huobi has claimed that they have not received any letter from UnionPay. They went on to add that, although it’s common for companies to promote their services and products through their logo, Huobi only used it as a way of expressing the payment link.
Despite the fact they haven’t received any official lawyer letter yet, Huobi still continues to provide services on their website. They are also ready to work with Union Pay and have agreed to adhere to the instructions given on trademark use.
According to Securities Daily News, Alipay, a third-party online and mobile payment platform, also warned its users against using Alipay to carry out virtual currency transactions. Participating in Bitcoin trading on such a platform is considered as a violation of the code of practice and penalties will be imposed on such accounts.
Alipay and Wechat are reported to have deactivated at least 3,000 accounts that have been making cryptocurrency OTC Bitcoin trading.
Tencent, a Chinese technology giant and the parent company of Wechat Pay, noted that some of its accounts on the Wechat platform have been publishing information relating to the Initial Coin Offerings (ICO) while at the same time creating crypto-related hype. This led to the ban of 8 crypto-centric news outlets on its WeChat platform. These outlets are considered the main source of communication in Asia.
In September of 2017, the
“Announcement on Preventing the Risk of Subsidy Issuance Financing”
made it clear that non-bank payment institutions and financial institutions are prohibited from conducting any token related transactions. In January 2018, the Business Management Department of The Peoples Bank Of China gave the final push for payment channels companies. They issued
“Notice on Carrying out Self Inspection and Correction of Payment Services for Virtual Currency Transactions”.
The notice required all payment institutions to do a self-inspection and rectification.
It is evident that Alipay and Wechat are struggling to keep up with the regulations by the government agencies in monitoring cryptocurrency transactions.