China continues the crackdown on cryptocurrencies, nearly a year after the government imposed a wide-ranging ban on local exchanges and initial coin offerings (ICOs).
In the most recent development, the Guangzhou Development District - one of major special economic zones in southern China - has banned all promotional events related to cryptocurrency, the South China Morning Post reports.
The notice distributed by the District on August 24 comes a week after a similar ban was issued by the authorities of Beijing’s Chaoyang district, warning office buildings, hotels and shopping malls in the central district of China’s capital against hosting any events promoting cryptocurrencies.
Furthermore, in a joint public notice Chinese watchdogs and authorities including the Banking Regulatory Commission, the China Central Network Information Office, the Ministry of Public Security, the People's Bank of China, and the General Administration of Market Supervision blasted ICOs and other ‘illegal’ cryptocurrency crowdfunding.
The regulators warned that some “unlawful elements” that have recently been using terms like “financial innovation” or “blockchain” to solicit investments are actually Ponzi schemes.
At the same time, favorite Chinese search engine and social media platform Baidu has started restricting digital currency and ICO related topics on its platform, according to a report by BTCManager.com.
Baidu has reportedly blocked all the cryptocurrency-focused channels on the platform and deleted all information about virtual currencies and ICOs, forcing crypto enthusiasts, project organizers and investors to migrate to Facebook and Telegram instead.
The move follows similar bans by Tencent and Alibaba, which have cracked down on any transactions related to virtual money on their mobile payment services.
Tencent has said it will ban cryptocurrency trading on its social app WeChat through measures including real-time monitoring of daily transactions and block suspicious transactions when necessary, South China Morning Post reports.
At the same time, Alibaba-controlled Ant Financial has saidthat it will restrict or ban accounts on its internet-payment platform Alipay when they are found to involve cryptocurrency trades.
The firm also intends to offer “risk prevention education” in an attempt to “remind users not to be deceived by various false propaganda, to recognize the risks of virtual currency transactions, and to avoid the possible losses suffered.”
This comes as China is blocking access to the websites of 124 offshore cryptocurrency exchanges in the country.
On September 4 last year, seven government agencies of China, the People’s Bank of China (PBOC), the Central Cybersecurity and Information Technology Lead Group of the Communist Party of China, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, China Banking Regulatory Commission, China Security Regulatory Commission and China Insurance Regulatory Commission, jointly issued anotice regarding prevention of risks of token offering and financing.
The notice banned all ICOs in China and ordered that any organizations or individuals who had previously completed an ICO to make arrangements including the return of token assets to investors to protect investor rights.
The document defined ICOs as an unauthorized fundraising tool that may involve financial scams. The committee provided a list of 60 major ICO platforms for local financial regulatory bodies to inspect.
In January 2018 People's Bank of China moved to ban all domestic and foreign cryptocurrency exchanges and ICO websites.
The National Internet Finance Association of China (NIFA), a self-regulatory organization in the field of internet finance, has implemented a feature on its platform to help governmental authorities in their clampdown of illegal initial coin offerings.
According to CoinDesk, Chinese residents are able to file complaints on crypto-related activities defined as illegal by the People’s Bank of China in its ICO and crypto trading ban last year.
The Central Bank of China is calling the country’s crypto ban a huge success, citing recent data that shows the Chinese Yuan being used in less than 1% of crypto-trades.
The activities listed on NIFA's website include operating an exchange for fiat-to-crypto and crypto-to-crypto trading, directly or indirectly providing registration, trading, clearing and settlement services for token sales, and offering insurance services for crypto-related businesses.
Meanwhile, China is the undisputed world leader in Bitcoin mining.
Chinese mining pools BTC.com, Antpool, BTC.top and ViaBTC are in control of 61,7% from all Bitcoin network’s hashrate.
China is home to the world’s three largest crypto mining hardware manufacturers - Bitmain, Canaan and Ebang. All three companies have recently joined the list of "unicorns" – private companies valued at over $1 billion – for the first time. The list is compiled by Shanghai-based Hurun Research Institute.
Valued at $10.3bn (70bn yuan), Bitmain ranked 13th on the list. Hurun values Canaan and Ebang at around $3 billion and $1.5 billion respectively, placing the firms at 32nd and 53rd on the list.
Despite the large-scale crackdown on crypto-related activity, China is still not safe from crypto-related crimes. Chinese police have reportedly arrested three suspected hackers alleged to have stolen Bitcoins and other cryptocurrencies worth $87 million, CCN reports.
The suspects are altogether alleged to have stolen an initially estimated 600 million yuan (approx. $87 million) by targeting corporate and personal network systems through a number of illegal means including cyber-intrusion and hacking, police claim.
In July, a joint law enforcement effort between Chinese authorities led to the arrests of developers of malware that amassed $2 million in cryptocurrency by allegedly mining them across a million infected computers in the country.
During the last few months, police in the city of Tianjin and the Anhui province have also arrested cryptocurrency miners for stealing electricity to power their mining rigs, equipment which has also been seized by the authorities.
In another crypto-related breach, a hacker is selling the personal details of over 130 million hotel guests for eight bitcoins on a Chinese Dark Web forum, according to Bleeping Computer.