Business 1 March 2018Cecille de Jesus
China stretches ‘Great Firewall’ to foreign crypto exchanges still catering to locals
China is stretching its crackdown on (external) cryptocurrencies as their home-grown cryptocurrency buds.
China’s brutal crackdown on cryptocurrency activity throughout the past year has been bloody, with several local exchanges and miners shutting down. This is especially painful for the whole world since the country houses around 79% of the global hash rate for BTC. Just last month, they issued another warning against cryptocurrencies and said that fintech checks for any possible cryptocurrency-related activity and “disguised ICO’s” will be a regular thing.
But they’re not done yet.
Now the government is targeting international cryptocurrency exchanges that could still be accessed by their residents. Chinese news outlet Yicai says that some of the local cryptocurrency exchanges that shut down moved out of the country, but were suspected of bypassing the Great Firewall and transacting with customers within the country. Apart from this, some Mainland investors have reportedly been able to open bank accounts in Hong Kong, US, and Japan after China’s crackdown, and are still trading virtual currencies through these accounts to circumvent the government’s regulations.
To put an end to it, the government will be peeking into bank accounts and online financial accounts of businesses and individuals suspected of getting involved in cryptocurrency trade.
China’s heavy-handed purge of cryptocurrencies will probably not end, at least not for external cryptocurrencies. The government is squeezing out possible competition as they are preparing their own national cryptocurrency, according to Bloomberg.
Last year, the People’s Bank of China (PBoC) announced that they have completed trial runs on algorithms for their digital currency, which will have the same legal status as the Chinese yuan. Bank of China (different from PBoC) has also been actively filing for a patent that is supposedly a blockchain scaling solution. Some doubt it, however, since the description of the mechanism sounds very much like a way to squeeze in “trusted parties” to maintain control and centralization.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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