China’s war on cryptocurrency just received reinforcements on two flanks. The People’s Bank of China (PBoC) in Shanghai and the government of Shenzhen are rallying the troops to go after crypto exchanges and crypto-centered companies, and the results are already paying off. One exchange has been shut down by authorities and ten of its employees arrested.
The PBoC’s headquarters in Shanghai issued a warning last Friday, asserting that it is going to begin to target crypto exchanges, adding that it would “adopt monitoring measures such as interviews, inspections, and bans on the monitored entities involved in virtual currency activities to resolve related risks in a timely manner.”
The move comes as talk increases about a new digital yuan, an official digital currency offered by the PBoC, being introduced. The hype surrounding the possibility has led to cases of fraud and scams with certain individuals already offering a supposed PBoC-backed token that is fake. The PBoC stated in its warning, “There are multiple risks in virtual currency issuance financing and trading, including false asset risk, business failure risk, investment speculation risk, etc. Investors should enhance their risk prevention awareness and beware of being fooled. Being cheated.”
Shanghai is reportedly following suit. There, the government’s finance bureau announced that it is looking into 39 unnamed crypto exchanges in an action that will involve the PBoC and local authorities. These companies are going to be scrutinized to determine if any illegal activity is taking place and the government states (according to Google Translate), “The operation will focus on three activities: first, providing virtual currency trading services or opening virtual currency trading places in China; second, providing service channels for overseas virtual currency trading places, including services such as drainage and agency trading; In the name of the sale of tokens, raise funds for investors or virtual currency such as [BTC} and [Ether].”
The first of what will be many causalities is the BISS crypto exchange. Described as a “known up-and-rising exchange,” trouble began on November 18 with user withdrawals, as acknowledged by the company. All trading and withdrawals have been halted, but there is no indication about how much money could be at stake. The 10 arrests are allegedly due to those individuals being involved in an illegal operation since China doesn’t allow any type of crypto activity, except for, in some situations, crypto mining.
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