The People’s Bank of China has issued a new document where it lays out how it is toughening measures to keep cracking down on crypto trading activities.
The Chinese central bank said in an announcement on Friday that all services that let you exchange fiat currencies and crypto assets or between crypto assets themselves are now treated as illegal activities.
Such treatment will target over-the-counter services that are still available on Huobi, OKEx and Binance, which allow Chinese users to exchange their fiat yuan into crypto assets in order to participate in crypto trading activities.
Further, the notice specified that offering crypto derivative trading services is also an illegal business in China, even for overseas exchanges that make the service accessible to Chinese residents. It remains to be seen, however, if Huobi, OKEx and Binance will discontinue their OTC services.
The PBoC said individuals who live inside China but work for overseas crypto exchanges that making crypto trading available in China are also subject to legal prosecution.
What’s also notable in the statement is that it’s jointly issued by not only government agencies but also law enforcement.
China’s September 2017 ban was handed out by only seven government bodies including the PBoC and the Securities Regulatory Commission. But the statement issued today was co-signed by judicial agencies including the People’s Supreme Court, Supreme People’s Procuratorate and the Public Security Ministry, the top agency governing China’s police force. That is a sign that Chinese law enforcement could become more active in the broader crackdown.
The price of bitcoin has dropped about $2,000 after the release of the PBoC’s statement, which follows its crackdown notice in May this year (one that saw a large exodus of bitcoin miners from the region).
Meanwhile, the National Development and Reformation Commission, the central macro economic planning agency in China, has issued a separate document this month that is making crypto mining crackdown part of the provincial government’s yearly key performance metrics.
It’s a move that aims to make the mining crackdown a systemic and continued effort given that Chinese investors have still been mining in a more decentralized and disguised fashion.