Official: China Will Continue to “Crush” Provision of Crypto Investing to Its Citizens

An official at the People’s Bank of China (PBC) tasked with regulating internet finance has reiterated the Chinese state’s determination to stop all ICO and crypto investing in the country, even solicitations to invest emanating from overseas, Coindesk reports.

According to the the Chinese publication Yicai, Pan Gongsheng, Deputy Governor of the People’s Bank of China and Director of the State Administration of Foreign Exchange as well as head of “The Finance Rectification Working Group” told colleagues on Monday that the moment calls for decisive action and long term policy creation to restrict access to “digital asset” investing.

Pan referred broadly to many aspects of peer-to-peer online finance, but also narrowed his comments to discuss ICOs (initial coin offerings), ‘disguised’ ICOs and “crypto asset” trading, all of which are prohibited in China, and “represent illicit forms of fundraising and securities issuance,” according to Coindesk’s Wolfie Zhao.

Pan reportedly told working group members that, although domestic crypto trading platforms have all been shut down in China, offshore exchanges have been continuing to illegally service and solicit investments from Chinese nationals.

The comments surfaced just as the first meeting of the State Council’s Financial Stability Development Committee took place.

In a statement released by the PBC, Gongsheng said that preventing and resolving major risks is the first of the three major battles identified by the central government. And internet financial risk is an important aspect of financial risk. The coordinated effort by multiple government branches is tasked with establishing a regulatory system that adapts to the characteristics of Internet finance (aka Fintech).

According to Zhao, Gongsheng was unequivocal:

“Any new financial product or phenomenon that is not authorized under the existing legal framework, we will crush them as soon as they dare to surface.”

Although the Deputy Governor did not lay out details as to how the activity will be quelled, Coindesk reports that Chinese messaging app WeChat, for example, has been placing limits on the amount of fiat currency users’ can transfer on a single day, and may have been surveilling the app in an attempt to detect crypto trading.

A person familiar with crypto in China told me earlier this year that, despite the ban, Chinese investors are continuing to access ICO “pyramid schemes” by word-of-mouth.

 

 

 

 

 

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