Beijing government warning that companies are not allowed to conduct cryptocurrency business

By Dorothy 12/27/19 12:57 PM

According to a notice issued Friday, Beijing Local Financial Supervision and Administration Bureau, Beijing Banking and Insurance Regulatory Bureau, Business Administration Department of the People’s Bank of China and Beijing Insurance and Beijing Securities Regulatory Bureau, both require companies not to engage in cryptocurrency businesses.

Image via RFA

Local governments in the capital city of China, Beijing, have jointly issued a new risk warning for cryptocurrency trading activities.

Some platforms have seriously violated user rules (issued in 2017) banning initial coin offerings, the authorities said. They also added that, with the recent push of blockchain technology in China, cryptocurrency trading activities have shown signs of revival.

Accordingly, they ordered all companies not to promote cryptocurrency projects or platforms; not participating in electronic money transactions; and do not provide any crypto-related services.

The government also called on investors to remain rational to avoid being deceived, as well as to report any violations of laws and regulations.

Last year, fundraising activities through security token services were “illegal,” Beijing’s Municipal Bureau of Finance said. The Chinese authorities have taken stringent measures since 2017, banning ICOs completely and forcing cryptocurrency exchanges to shut down.

The security token service is considered illegal in Beijing

Huo Xuewen, director of the Beijing Financial Affairs Office, said Saturday that security token services (STOs) are illegal in Beijing. Xuewen also issued a warning to the promoters and issuers of security tokens in the city and recommended: “to only participate in such services once the government has legalized them”. The legality of STOs is unclear in other jurisdictions in China.

The People’s Bank of China (PBoC), the country’s central bank, has taken a strong legal approach since September 2017 when it completely banned initial coin offerings (ICOs) and forcing some cryptocurrency exchanges out of the country. Last month, the PBoC also expressed their interest in IC ICOs disguised as airdrops.

China’s crackdown on cryptocurrency exchanges

In the west, it is quite well known that China has plagued cryptocurrency exchanges, once again, in the worst crackdown since 2017. According to the government official Xinhua, more than 500 people have been arrested, and over 300 social media accounts of cryptocurrency influencers have been arrested. close the door

But a lot of recent reports don’t capture the nuances of what really happened there, and why. The idea that the Government is at war with all cryptocurrency exchanges is simply not right. Some, like Huobi, are actually benefiting from the goodwill of the Government.