The Shenzhen branch of The People’s Republic of China has revealed the closure of eleven companies suspected of participating in the trading of cryptocurrencies.
Following China’s crackdown on cryptocurrency trading and mining, a number of companies have moved their business out of the country. Companies that continue to trade or mine cryptocurrency face large fines and jail time. Nonetheless, a number of companies are still continuing to trade in crypto, with reports emerging of 46 companies participating in illegal cryptocurrency trading.
According to a statement released by the Shenzhen branch of the PBoC, 46 companies are suspected of being involved with illegal crypto trading, with 11 being shut down as the result of an ongoing investigation by the bank’s special task force. The bank’s official notification announced the results of the special task force:
“Carry out special rectification of illegal virtual currency trading activities, and promptly clean up and rectify 11 newly emerging companies suspected of carrying out illegal virtual currency activities. Completed the rectification of a well-known domestic financial website that was suspected of propagating violations of foreign exchange deposit trading, and properly handled 8 reports of illegal and criminal activities related to online foreign exchange and cross-border stock trading.”
The ongoing crypto crackdown by Chinese authorities has increased in its intensity, seemingly flying in the face of the recent Bitcoin rally, and increase in global adoption of digital currencies. Despite the renewed regulatory scrutiny in China, Chinese investors have continued to participate in the crypto market through overseas exchanges. In a similar fashion, crypto mining companies such as Huobi, and Binance have relocated overseas, in order to avoid regulatory scrutiny. A deal was recently struck by Black Rock Petroleum Company that would see the relocation of up to one million chinese mining rigs to three natural gas-producing sites in Alberta.
While China seems to strengthen their crypto regulation “at least once in a bull cycle” – as Hong Kong’s Bitcoin Association noted in a tweet, restrictions this year have effectively banned any involvement in Bitcoin including the use of overseas exchanges to trade crypto. The recent announcement by the PBoC indicates the bank’s commitment to investigating, and penalizing, companies that choose not to follow the current regulations.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
