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Chinese Central Bank Reiterates Crypto Trading Risks

Chinese Central Bank Reiterates Crypto Trading Risks

Chinese central bank reiterates ICOs and crypto trading risks, stating that ICO financing model is posing a “serious disruption” to the “economic, financial and social order.” 

19 September, AtoZ Markets The central bank of China, the People’s Bank of China (PBoC) has issued a new notice for the public, which reminds investors about the risks that are related to the Initial Coin Offerings (ICOs) and cryptocurrency trading. 

Chinese Central Bank Reiterates Crypto Trading Risks

The notice has been published by the bank’s headquarters in Shanghai. The documents reiterated the strict stance that has been adopted by China’s Office for Special Remediation of Internet Financial Risks. Back in September 2017, Chinese authorities have introduced a blanket ban on ICOs. 

The recent notice criticizes the “unauthorized” and “illegal” ICO financing model for posing a “serious disruption” to the “economic, financial and social order.” The document reads:

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“[ICOs are] suspected of illegally selling tokens, illegally issuing securities, illegal criminal activities, financial fraud, pyramid schemes, and other illegal and criminal activities.”

The PBoC has also praised the success of the country’s strict limitations that have aimed at ICO market and other cryptocurrency related activities. The bank’s representatives wrote in the note:

 “[T]he global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%, effectively avoiding the virtual currency bubble caused by skyrocketing global virtual currency prices in the second half of last year in China’s financial market. The impact has been highly recognized by the community.”

China Crypto Market Oversight

Nevertheless, the bank recognized that there are some challenges remaining in the industry. One of them being a prevalence of offshore exchanges that are utilized by investors in order to surpass the Chinese crypto ban. 

The bank highlighted that the Office for Special Remediation of Internet Financial Risks has adopted a number of tailored measures. One of the latest initiatives from PBoC’s side is the suspension of 124 IP addresses that are suspected of offering a gateway to local crypto traders. The authority further stresses the increased efforts to “clean-up” payment channels and fortify overseeing and investigation mechanisms. The bank noted that around 3,000 accounts have already been suspended as a result of heightened oversight efforts. 

In conclusion, the notice outlines some recent measures that have been implemented in a bid to combat the circulation of crypto “hype” materials.

Earlier this August, the PBoC has issued a risk alert, aiming to warn investors against “illegal” ICOs. That time, the bank has warned that Blockchain and the idea of “financial innovation” are being utilized to trick investors into investing their money in a number of fraudulent Ponzi schemes. 

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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