China’s social media platform Weibo banned the accounts of leading
cryptocurrency exchange Binance and Tron cryptocurrency recently
due to “violations of laws and regulations and the relevant provisions of the
Weibo Community Convention.” At the same time watchdogs in Shanghai issued
notices calling for a clean-up of companies involved in cryptocurrency trading.
China has been dominating cryptocurrency headlines after President Xi Jinping officially embraced the blockchain technology despite banning Bitcoin back in September 2017. However, many assumed that the Chinese state would also be ready to open its arms for cryptocurrencies that it is not able to control.
The Shanghai headquarters of China’s central bank and the city’s financial regulator said in a notice they co-signed on Nov. 14 that local government agencies should work with any companies under their supervision that are tied to cryptocurrency to exit such business immediately.
Blockchain Yes, Crypto No
In the notice, the Shanghai regulators cited an order from China’s top internet-finance regulators, which they said is concerned about the resurgence of speculative bubbles after the recent promotion of the blockchain technology.
A separate announcement was published on the website of Beijing’s financial regulator on the same day, warning against the risks of illegal operations of financial-asset exchanges in the capital.
While China is an avid supporter of blockchain, authorities have waged a two-year campaign to restrain crypto activities amid concerns like speculation, fraud and capital flight. In 2017, China ordered an end to exchange trading of digital currencies, but trades are still rampant through alternatives like over-the-counter channels offered by exchanges Huobi and OKEx. Malta-based Binance also recently started to host OTC yuan trading.