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Tuesday, 06 February 2018 10:28

China plans total ban on cryptocurrency trade, ICOs: report Featured


China is set to block all websites, local and foreign, connected with trading in cryptocurrencies or initial coin offerings, a newspaper affiliated to the People's Bank of China says.

Financial News said Beijing was acting to prevent the risk involved with currencies such as bitcoin which have shown the tendency to be extremely volatile. At the time of writing (10.36am AEDT) the value of bitcoin on the Coindesk exchange was US$6865.78.

“To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs,” the paper said.

South Korea, another major player in the cryptocurrency trade, has not made any moves towards regulation, though it hinted at doing so about two weeks ago.

The government may have put off any moves that may affect the market in view of the Winter Olympics which begin in Pyeongchang County on 9 February.

“ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions," the Financial News article said.

“Overseas transactions and regulatory evasion have resumed … risks are still there, fuelled by illegal issuance, and even fraud and pyramid selling."

The South China Morning Post  said that China's latest stance appeared to have been taken to quell the frenetic activity in both tradings and ICOs in the country.

In one case, reported by the TMT Post, angry investors grabbed the founder of an ICO project called ARTS and took him to the Beijing municipal financial bureau, accusing the man of fraud after a virtual coin issued by ARTS fell from 0.66 yuan to 0/13 yuan in two weeks after it had listed on an exchange last month.

The Post said that advertisements for cryptocurrencies had disappeared from the biggest search engine Baidu and also the main social media platform Weibo.

Japan is reported to be considering regulation after a cryptocurrency exchange, Coincheck, was breached and funds worth US$500 million stolen. Japanese officials were quoted as saying that cryptocurrency regulation would figure at the next meeting of the G-20.

Last month, the US froze the assets of AriseCoin, apparently because the ICO was believed to be fraudulent. A decision on how to classify cryptocurrencies is yet to be made, as also one as to which of the currencies qualify as securities.

India was reported to be looking at a total ban on cryptocurrency last week, following statements by the Finance Minister Arun Jaitley. That turned out to be incorrect.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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