Source: Adobe/Mariia Korneeva
After the bluster, the real Chinese crackdown on cryptocurrencies is about to begin – with regulators, courts and law enforcement agencies now examining how to implement the terms of last month’s tumultuous joint statement on cryptocurrency-related activities.
The landmark statement was authored by the People’s Bank of China (PBoC) and called on companies in the country to take punitive measures against crypto trading customers. It also warned foreign platforms targeting Chinese customers that they could face penalties.
Similar statements have been made in the past, but the crypto mining, hardware, and exchange industries seem to have been truly startled by the joint statement – to the point where a number of prominent crypto players promptly shut down their businesses. Exchange giant Huobi reportedly evacuated its employees overseas a week before the statement, apparently aware that the PBoC had something big in the pipeline.
However, the companies appear to have made their decisions based on the fact that the PBoC’s co-signatories were heavyweight enforcers with real punitive power: namely, the likes of the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security.
According to the media company Jiwei, these and other authorities are now reviewing the punishment system for illegal crypto mining and undeclared crypto activities.
The Chinese title of the statement can be roughly translated as “Further preventing and eliminating risks related to cryptocurrency trading.” And the “elimination” of crypto activities could become a major priority for the bodies that have begun to “deliberate “on how to implement regulatory requirements.”
Prosecutors and judicial authorities are “conducting investigations into crypto exchanges, mining and other related activities” and “considering” their options for “conviction and punishment,” according to the media.
“Judicial interpretations” of the statement will be announced “in due course,” the paper added.
A PBoC spokesman briefed the media on Oct. 11 With similar remarks to those in the joint statement, adding that the government “will take strong action against crypto trading.”
The spokesman again named three tokens: Bitcoin (BTC), Ethereum (ETH) and the stablecoin Tether (USDT). The latter is an important gateway for Bitcoin traders in China and has so far enabled many mainland Chinese to access BTC on overseas platforms.
The spokesman added that Beijing’s policy “on cryptocurrencies is clear and consistent” and that enforcement agencies would “coordinate” their efforts and that further enforcement measures would be taken jointly at the central and provincial levels.
The PBoC concluded by saying that the crackdown would maintain China’s “economic and financial order” and “social stability.”