China to Widen Crackdown on Digital Currency Activities

While some countries are still not fully decided in terms of their stance on digital currencies, it seems like China is doing its best to limit crypto-related activity as much as possible.

Following their ban on domestic exchanges and initial coin offerings, it seems like Chinese authorities aren’t stopping here. Therefore, new reports indicate that the crackdown will be widened, as some other methods of trading will be targeted. These include, but are not limited to over-the-counter (OTC) trading, offshore sites being used for centralized forms of trading, but also P2P trading in general.

The initial report cited an unknown individual, who is close to the Group of Internet Financial Risks Remediation, China’s biggest internet and finance regulators. At this time, it is unknown how the authorities will handle the crackdown, and how these platforms will be defined. In other words, will crypto enthusiasts in China any way of purchasing and selling coins?

Domestic access to offshore and local platforms will also be banned, whereas people providing bids for trading in large amounts will be targeted as well.

Following the initial ban, many of China’s biggest exchanges such as Huobi or OKEx have moved overseas, where they continue to offer crypto-to-crypto and OTC services to local users.

Reports also indicate that many of the crypto investors in the country have begun using Telegram, in order to continue their activity. The trading chat groups have attracted a large number of users, who negotiate prices via text. Group managers have even implemented KYC policies, in order to help prevent fraud and money laundering, thus avoiding attracting the attention of authorities.

At this time, China’s reasons for limiting digital currency activity include the desire to maintain financial stability in the country – this is somewhat understandable given the fall in value that the Yuan has faced over the last couple of months.

A guide for miners to make an ‘orderly exit’ from the business has also been released, therefore it is likely that sooner or later, the mining industry will also be cleared.