According to a report by China Times, August 26, 2018, China’s main search engine operator Baidu, has temporarily blacked-out its leading virtual currency chat rooms on account of “Virtual Currency Bar” and “Digital Currency Bar.”
Alibaba-owned South China Morning Post reports that the three IT titans Baidu, Alibaba and Tencent are aiding regulators in their latest crackdown on cryptocurrencies on their platforms.
China on a Crypto Crackdown Quest
A Baidu spokeswoman said the two online forums remained unavailable on Monday having been shut down temporarily “in accordance with relevant laws, regulations, and policies.” Alibaba and Tencent have stated their support for a crackdown on cryptocurrency related transactions on their mobile money services.
Without giving details, both Alibaba and Tencent stated they would monitor cryptocurrencies. A statement from Tencent said the company was banning crypto trading on WeChat using measures that would include real-time monitoring of transactions to block any suspicious transactions. On its side, Alibaba’s Ant Financial said it would ban or restrict accounts on its Alipay platform if they involved cryptocurrency payments.
The Chinese government started a crackdown on cryptocurrencies in September 2017 by banning local exchanges and ICOs while it bars malls, hotels, and offices from organizing crypto-related events. The move by the government prompted an exodus of exchanges and ICO projects to user-friendly nations like Singapore but they have been attracting Chinese crypto enthusiasts using internet-based services like Telegram and WeChat, which authorities consider unlawful.
Blockchainreporter reported last week that the government was blacklisting over 120 websites belonging to offshore crypto exchanges that were offering trading opportunities to Chinese nationals.
China going Overboard with the Ban?
The Decision by Baidu, Alibaba, and Tencent, also referred to as “BAT,” followed China’s enhanced onslaught on virtual currencies. The authorities have been blacking-out crypto-related news forums on WeChat including those belonging to startups that raised millions of dollars through Initial Coin Offerings (ICOs).
Last Friday, the Ministry of Public Security and the Chinese Central Bank warned residents against getting involved in Blockchain and cryptocurrency.
The official notice said,
“Such activities are a gimmick of ‘financial innovation’ but Ponzi schemes in the essence.”
The notice warned Chinese citizens against cryptocurrency trading using offshore exchanges and online chat services including all crypto-related investment platforms promising low-risk high returns that online celebrities promote.
The government’s goal is to counter money-laundering activities and protect the status of the Chinese currency as the legal tender for transactions. Despite the clampdown, Chinese citizens can still access the Houbi Exchange which offers decentralized over-the-counter cryptocurrency trading.