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Alipay May Block Accounts Related to Cryptocurrency OTC Trading

China’s National Internet Finance Association of China (NIFA), a self-regulatory organization in the field of internet finance, warned Chinese citizens against participating in overseas ICO and cryptocurrency trading activities last Friday.

The association points out that OTC markets still belong to the “virtual currency” trading places, ,obviously inconsistent with current regulation. In these trading activities, some domestic social networks have facilitated peer-to-peer trading, and some non-banking payment tools are also offering payment services for ‘virtual currency’ transactions.

It is the latest stern warning issued by the Chinese authorities on the frenzied cryptocurrency trading.In spite of a heavy official clampdown on centralized bitcoin exchanges and ICO in September, an increasing number of Chinese citizens jump into the crypto game, seeing  booming peer-to-peer transactions in China.

China’s three largest cryptocurrency exchanges Huobi, OKCoin and BTCC China have rapidly launched peer-to-peer OTC( over-the-counter) markets since then, and relocated their business to Hong Kong. OTC trading allows Chinese traders to buy and sell cryptocurrencies using Chinese Yuan through Alipay, Tencent’s Wechat Pay and bank transfers, while these bitcoin exchanges act as market makers and guarantors.


On its payment service for digital currency trading, Alipay the mobile payment arm of Ant Financial, an affiliate of Alibaba Group Holding, offered a response.

Alipay has always adhered to the principle of not providing services to virtual currency transactions such as Bitcoin. We will continue to closely monitor over-the-counter trading activities. Once we find any suspicious crypto-related transactions, we will take appropriate measures depending on circumstances immediately.”Alipay said, according to the Shanghai-based news portal Jiemian.

But WeChat Pay was not reached for comment as of press time.


The Business Administration Department of the People’s Bank of China(PBoC) issued a document on January 17,titled“Notice Concerning the Self-examination and Rectification of Providing Payment Services for Illegal Virtual Currency Transactions”, requiring payment service providers to strengthen monitoring of daily trading and shut down payment channel for accounts related to cryptocurrency.

Actually, financial regulators face a harsh reality in regulation that as payment agencies do not know the reason behind transactions, peer-to-peer trading can hardly be forbidden.


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