China to Regulate Offshore Cryptocurrency Exchanges
February 4, Beijing (Xinhua News)- According to the People’s Bank of China, Chinese cryptocurrency investors have headed to offshore crypto activities since the ICO ban last September, considering the various risks of offshore transactions, China is taking a series of regulatory measures.
Last year, Chinese regulators make continuing effort to ban ICO (initial coin offerings), shut down local cryptocurrency trading exchanges and then limit bitcoin mining. But activity in the cryptocurrency and bitcoin craze has continued through alternative channels in China despite the escalated crackdown. Exchanges previously based in China simply moved their servers abroad and continues providing services for Chinese investors. Considering that investors are faced with various risks involved in offshore cryptocurrency transactions, Chinese regulators are making strike again.
“To prevent financial risks and safeguard financial stability, the state will pay close attention to crypto practices and adopt a series of regulatory measures to ban all crypto-related commercial business including banning and blocking both domestic and offshore cryptocurrency trading platform websites.
Once found, will be immediately shut down. The future depends on its development and does not rule out the possibility of unveiling further regulatory measures.”
It is believed that related regulatory measures has been on the way. Some sites of cryptocurrency exchanges have been blocked. It is worth noting that some exchanges have stopped providing services to users in China.
Last Thursday on February 1, Binance, among the first fleet of Chinese crypto exchanges to move overseas, announced to users in China on its website saying,
“in accordance with relevant Chinese policies and regulations, Binance will not provide services to users in mainland China”.
Before that, domestic exchanges as IOST, UIP and KuCoin have already blocked IP access from mainland China. And a screenshot about Huobi stopping domestic services from Feb.10 also triggers panic.
In addition to crypto exchanges’ voluntarily stop providing services, users’ C2C OTC transactions are also being investigated. Some Chinese crypto investors said on social network that they were recently asked about fund usage by China Merchants Bank which are required to investigate C2C OTC transactions through payment from banks.
The regulation arm has now reached out to overseas. Cryptocurrency platforms registered in China with servers deployed abroad are targeted and gradually phased out.
An insider said,
“What Can and Cannot have already been made clear in the Notice on ICO issued by seven ministries on September 4, no one can make exception. There’re in effect no new measures now but further implementation of the ICO ban.”