David Durand, Advisor, Innovation and Advocacy
September 9th, 2020
Bloomberg News | | Nov 27, 2019
(Bloomberg) -- China’s latest crypto-crackdown is already claiming its first casualties.
At least five local exchanges have halted operations or announced they will no longer serve domestic users this month, after regulators issued a series of warnings and notices as part of a cleanup of digital currency trading.
China’s stepping up scrutiny of its massive cryptocurrency industry just weeks after President Xi Jinping ignited a market frenzy by declaring Beijing’s support for blockchain technology. Financial watchdogs including the Chinese central bank have in past weeks ordered crypto firms to shutter and warned investors to be wary of digital currencies, seeking to rein in a market prone to excesses. Weibo, a Chinese Twitter suspended accounts operated by major exchange Binance Holdings Ltd. and blockchain platform Tron.
Taken together, the latest wave of shutdowns and restrictions represent the biggest cleanup of the sector since an initial Chinese clampdown in September 2017. Although exchanges that allow users to buy Bitcoin and Ether with fiat money were banned, trading had remained rampant in China through over-the-counter platforms or services that deal with crypto assets only.
“It appears that, like everything else within their borders, China feels it needs to have tighter controls on the crypto market including exchanges, miners and asset issuers,”
said Katie Talati, head of research at Arca, a Los Angeles-based asset manager that invests in cryptocurrencies.
“I do believe, however, they are moving in a similar direction as Japan and other jurisdictions that have tight and clear regulations for crypto businesses.”
“The current situation and environment for blockchain in China is still very positive,” Tron founder and crypto entrepreneur Justin Sun said. “In the short term, it may not get as much progress as we’d expect.”
Here’s a timeline of the recent developments from China that’s been blamed for the plunge:
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