Per a report by Shanghai Securities Times, the local media outlet of the Chinese financial authorities, the China National Fintech Risk Rectification Office is on a crackdown quest against cryptocurrency exchanges operating in China with foreign IP addresses. According to the report published on August 23, the governing body has so far identified 124 such crypto exchanges and is ramping down the crypto platforms.
Blockchain In, Crypto Out
China is known to have maintained an exciting position in the crypto world. While the country has openly embraced blockchain technology, it has been pretty rough towards any crypto activity within its jurisdiction.
In September last year, the Chinese government had banned fundraising for tech start-ups through ICOs in the country. The official report by the government defined ICOs as an “unauthorized fundraising tool” that may lead to financial scams in the long run, compromising investor’s financial safety in the process.
The ruling garnered substantial support from other governmental administration bodies in China as authorities like the People’s Bank of China, China Securities Regulatory Commission, China Banking Regulatory Commission and China Insurance Regulatory Commission displayed their agreement regarding the decision through a joint statement.
It is also worth noting that major global crypto exchanges such as Binance, Bitfinex, and OKEx are not accessible to the Chinese populace.
On the other hand, the Asian giant has shown a remarkably positive stance towards blockchain. Government authorities and local bodies have been incessantly trying to establish a healthy ecosystem for blockchain startups by investing heavily in the technology infrastructure. Incentives including government subsidies and tax credits are also aimed at encouraging promising tech companies. Blockchainreporter reported on August 22 that blockchain would be used to raise finances for a massive $22 billion deal to ensure full electrification of Chinese buses by 2021.
Missing Out on Crypto Train?
Amidst crackdown on crypto activities in the country, the question arises whether the decision will be a wise one in the long term. Granted that the current bearish market sentiment and ICO exit scams have financially distressed a lot of innocent investors, but all is not black when it comes to cryptocurrencies.
Digital assets industry has witnessed rapid developments in other pro-crypto countries in the world. Blockchainreporter detailed on South Korea’s extraordinary legislative session on August 21, which is aimed to outline firm regulations for the ICOs and cryptocurrency trading in the country.
Although it is still one of the top economies in the world, Chinese growth has slowed down in recent years. Given the rapid pace at which the crypto industry is experiencing developments, perhaps China could reconsider its stance on the whole ordeal.