China has made no secret of its intentions to block all websites and platforms that facilitate cryptocurrency trading as well as initial coin offerings. Even after launching a crackdown on such Chinese platforms earlier this year, it appears the efforts are yet to bear any substantial fruits.
China Cryptocurrency Ban
Chinese state media, Voice of China, has criticized Chinese cryptocurrency exchanges and initial coin offerings that continue to operate. This therefore provides the clearest indication that authorities are becoming disgruntled.
In September of 2017, seven ministries and commissions of the Central Bank issued an announcement. They began requiring all institutions desist from facilitating any form of digital currency trading. However, it appears cryptocurrency exchanges shrugged off the warning as most continue to operate in total disregard of the ban.
Some Chinese cryptocurrencies have also gone forth and set up cryptocurrency exchange platforms oversees as they seek to provide services to mainland users. OKEx is one of the cryptocurrency exchanges that has found itself at odds with authorities.
Also, the state media has taken a swipe at the changes accusing OKEx of using shell companies to hide its Chinese operations. The report alleges that after the cryptocurrency ban was announced, OKCoin transferred users’ data and digital currency to the OKEx Exchange which is headquartered in Belize.
Even though the company claims to be headquartered abroad, its entire team is based in Hong Kong. Not only that, Chinese customers account for a majority of the exchange operations.
ICOs which remain banned in the country also appear to be thriving in the background, something that has not gone well with authorities. Voice of China accuses the ICOs of operating in total defiance of the central government directive. Issuance of tokens is an unauthorized and illegal public financing activity in China.
Cryptocurrency Regulation Opposition
Increased regulation has not gone over well with cryptocurrency exchanges and enthusiasts. Not only that, industry experts show disapproval. Deng Jianping is a professor at The Law School of Central University. He has already taken a swipe at the one size fits all cryptocurrency regulations.
The professor is calling for a more dynamic global and flexible regulatory framework. The hope is that it will foster innovation in the cryptocurrency sector. According to Jianping, digital currency use is worldwide, and having simple prohibition will not be useful. He believes people will ways find ways to bypass the rules.