China Hints At Licensed Bitcoin Exchanges With ‘Zero Tolerance’ On Cryptocurrency Crime

October 4, 2017 4:09 pm Published by

China has published a statement calling on regulators to take a “zero tolerance” approach to cryptocurrency-related crime, condemning the virtual currency as a tool used by the criminal underworld as a way to evade government prosecution, the country’s official news agency said Wednesday.

The agency said regulators must take a hardline stance against its usage to prevent crime.

However, the regional cryptocurrency news service cnLedger reported, some of the proposed regulations seemed to hint at potential future licensure for bitcoin exchanges, the report said.

The president of the official government news agency Xinhua, who also sits on the Chinese Communist Party’s Central Committee, added officials must act with “iron fist governance,” according to a rough translation, the report said.

Meanwhile, regulators recently issued a comprehensive prohibition on initial coin offerings (ICOs), making it illegal for Chinese startups to raise money using this fundraising model and investors to contribute to foreign ICOs, reported.

In addition, regulators have reportedly forced domestic bitcoin trading platforms to “voluntarily” shut down. Some, including BTCC — formerly the world’s longest-running bitcoin exchange — have already shut down, while select exchanges are allowed to continue to operate until the end of October, the report said.

However, believing many Chinese cryptocurrency users will attempt to bypass the regulations by using foreign trading platforms located in Japan, South Korea, and elsewhere, Xinhua says “regulatory vacuums” remain and deserve government attention.

In a statement, the agency said: “[T]here are still many regulatory vacuums in the field of virtual currency, which require governments and central banks to give enough attention to the regulation as soon as possible.

Xinhua calls for targeted, hardline regulatory measures including licensure, record-keeping, strict AML/KYC policies and transaction limits, Bitcoinsnews .com reported.

These policies would appear to leave the door open to a potential future roll-out of a cryptocurrency exchange licensing program that would allow trading to resume in a heavily-regulated environment, the report said. However, cnLedger commented don’t expect licensure to occur in the short-term., Jack Durschlag

Have your say:

Your email address will not be published. Required fields are marked *