A major Chinese crypto crackdown is currently taking place that is targeting 120 offshore cryptocurrency exchanges. Although it is unclear why the Chinese government are taking these steps at this time, it is not looking good for the Chinese crypto industry.
Just a few days ago, we reported that the Chinese messenger app, WeChat, had banned some cryptocurrency media outlets, but with these new developments regarding a crackdown across the Chinese crypto industry, it has gone to the next level.
Government to block offshore Chinese crypto exchanges
Although the Chinese crypto scene is one of the largest and most robust in the world, on the surface it would seem that Chinese authorities have a real disdain for digital currencies. The Chinese government is taking steps to block access to 124 crypto trading platforms that are located offshore but used by Chinese crypto fans.
The article was broken by the Hong Kong news outlet, the South China Morning Post, who has reported that Chinese authorities that are linked to the watchdog group, the Leading Group of Internet Financial Risks Remediation, are in the process of blocking the IP addresses of offshore crypto exchanges that serve local Chinese crypto users in areas where crypto is prohibited.
At the time of writing, the watchdog group, who were formed in 2016, have not released any information or commented on the implementation of the ban, the names of the companies or the timeframe on blocking the sites.
Mixed signals from Chinese authorities
China is the master at sending out mixed signals toward Chinese crypto users. Although the first crypto bans were put in place last September, and new measures were being prepared in February by the People’s Bank of China (PBoC) to curtail Chinese crypto trading, there are still many positive stories coming out of China from leading figures such as China’s Ministry of Industry and Information Technology (MIIT), Xin Guobin back in July. China also still has a massive grip on the cryptocurrency mining industry.
The latest Chinese crypto crackdown has come out of the blue and seems to be a coordinated effort by authorities. Just last Friday in downtown Beijing, a ban was imposed in the district of Chaoyang, which prohibits public places such as hotels and malls from even hosting crypto-related events and gatherings in a move that is extremely heavy handed.
Chinese crypto fans were quick to mention that those crackdowns in Chaoyang were isolated and local incidents, but the overall sentiment is that a broader crackdown on crypto is likely to coincide with the one-year anniversary of the Chinese government imposing a ban on crypto trading and ICO projects.
Even though the PBoc recently talked about being vigilant in the face of foreign ICOs, which are forbidden in China, a local Shenzhen company called the Puyin Blockchain Group recently raised USD 60 million in three separate ICO projects, and then pulled what some believe to be one of the biggest exit scams of all time.
At this moment, it is unclear what the impact will be on Chinese crypto prices with news of the crackdowns. However, it doesn’t bode well for the diversity of the crypto industry in China as a whole and will be seen as another back-step for crypto adoption across the nation.
I am very experienced writer/blogger who has been an active member of the cryptocurrency community for several years. I have experience writing for crypto news sites and proactively been involved in the startup of other ICO and crypto ventures over the course of the past four years.