Several Crypto OTC Traders in China Are Blocked From Bank Service
China’s central bank (PBoC) is cracking down on money laundering since this year 2020. Due to the non-compliance of CNY-Cryptocurrency, OTC traders have long been the targets of severe crackdown from regulators. Up to now, many OTC traders in China have to stop their business.
Recently, several crypto Chinese OTC traders have been listed in the “punishment list” of China’s central bank, and all bank cards under their name have been suspended from Non-OTC trading. This means that in addition to the investigation from the traditional public security system, private banks and China’s central bank have also begun to supervise and control crypto OTC trading.
China’s Central Bank has delegated the responsibilities and obligations of cracking down money laundry to major banks and financial institutions. In this case, the anti-money-laundering monitoring of banks has become very strict, and any account opening needs to be reviewed by the anti-money-laundering system. It is said that some local banks even stopped all card businesses to crack down on money laundering.
Because major banks have a large number of user data and transaction data, identification of money laundering and cryptocurrency transactions will be more sensitive through AI and other algorithms, so the probability of freezing cards of major banks is higher.
The specific process is that after the bank’s system alarms and transaction restriction, it will be reported to the central banks, and the central bank will issue the corresponding punishment list after the audit.
On September 18, police in Guangxi and Nanning Central Branch of PBoC announced the list of 1091 bank account, requiring the punished individuals to be suspended from bank account Non-OTC business and payment account business within five years.
In fact, due to the lack of corresponding regulations, financial institutions have different judgment standards for cryptocurrency transactions. For example, China’s Merchants Bank CMB, for example, has always been a supporter of anti-money-laundering. In 2018, CMB Hong Kong Branch announced: according to relevant requirements, if the transaction involves cryptocurrency in the customer’s account, the account may be banned permanently.
Industry insiders pointed out that in the current situation, it is not only involved in black money that will be frozen accounts, but the behavior of buying and selling cryptocurrency itself may trigger the risk control mechanism of banks in China. However, the latter is relatively controllable for individuals, and there is less complete freezing; for OTC traders, they have to use other people’s accounts, but this may be investigated again or even being listed in the “blacklist”.