Why did China shut down Bitcoin trading platforms?
Why did China shut down Bitcoin trading platforms? China\’s policy towards Bitco
Why did China shut down Bitcoin trading platforms? China’s policy towards Bitcoin has been very clear since June of last year: to crack down on virtual currencies. However, due to regulatory reasons, the Chinese government has blocked cryptocurrency exchanges since March 4th this year, but has not stopped this action. Instead, it has started large-scale operations and clean-ups. According to statistics, there are currently more than 200 illegal enterprises holding digital tokens that have been shut down or frozen in China. According to the “Notice on Prevention of Bitcoin Risks in 2017” issued by the National Office of Network Information, it mentions:
1. Ban any domestic units or individuals from providing services priced in RMB and paying to third-party institutions. 2. Restrict all activities related to ICO and token financing, prohibiting the raising of funds for others’ profit or illegal sale of token tickets and other commercial activities. 3. Publicly promote “Internet+ Investment,” “Blockchain+ Finance,” and “Internet+ Insurance” in accordance with laws and regulations. 4. Strengthen network information security management. Why did China use strict laws and regulations to prevent the use of Bitcoin and other unofficial currencies for money laundering?
Firstly, it is aimed at some criminals who use anonymity technology to forge their real identities, thus inducing the public to participate in Bitcoin mining. Such crimes not only include market manipulation, but also involve hacker attacks. Once this happens, it may constitute fraud. Therefore, many organizations or individuals may choose to purchase and sell Bitcoin directly overseas to profit. If these companies are suspected of violating relevant regulations in China, they can apply to judicial authorities to hold responsible persons accountable. Another reason is that certain domestic companies have failed to comply with the requirements of the country’s anti-monopoly laws and cannot obtain permits for business license transfers. At the same time, in order to prevent investors from suffering losses, some large enterprises often adopt a method of acquiring Bitcoin trading platforms with a license issued by the government. For example, Hangzhou Qulian Technology Co., Ltd. (GCash), because it obtained 5 million yuan of China Bank shares equity financing in violation of regulations and later was suspected of false advertising and was subject to an administrative prohibition order issued by the court, it was detained by Beijing Haidian District Public Security Bureau in early July 2015. Since the beginning of 2018, the website has received feedback from about 23,000 users from all over the world, and in just over a week in 2019, it has received tens of thousands of complaints, many of which involve scammers. (Sina Finance)
So why did China close Bitcoin trading platforms due to this factor?
On the one hand, China has always maintained a friendly attitude towards encrypted digital currencies. On the other hand, it is also to avoid the impact of Bitcoin price fluctuations. Therefore, China’s reasons for closing Bitcoin trading platforms are also sufficient.
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