China blocks 124 cryptocurrency exchanges, warns of “scams”

Reports from China have relayed news of plans by authorities to block access China to 124 websites operated by off-shore crypto exchanges it believes are being used by mainland citizens. 

The plans, reported by the South China Morning Post, based of the Shanghai Securities News – a newspaper it describes as ” affiliated with the country’s financial and markets regulators”, reveal that Chinese authorities intend to continue to close down domestic crypto and ICO-related sites and continue to ban acceptance of crypto payments. The original report apparently cites “people close to the Leading Group of Internet Financial Risks Remediation”, a group instigated by China’s State Council in 2016, under the leadership of People’s Bank of China’s deputy governor.

Following that news – and other evidence of a crypto-crackdown, including Tencent’s move to shut down several large cryptocurrency and ICO-related accounts on the WeChat social media network, and a ban on the hosting of crypto-related events in Beijing hotels – The Financial Times today reported a move by Chinese authorities to warn about “criminals” running “fraudulent schemes under the moniker of ‘blockchain’, ‘virtual currency’, and ‘financial innovation'”.

joint statement from the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the Public Security Bureau and two other agencies said (via Google Translate) that “Such activities are not really based on blockchain technology, but rather the practice of speculative blockchain concepts for illegal fundraising, pyramid schemes, and fraud.”

The statement concludes (again, vis Google’s translation) that Chinese citizens should be “rational about the blockchain,” as well as establishing “a correct monetary concept and investment philosophy, and effectively raise the awareness of risk; and actively report the illegal criminal clues found to the relevant departments.”

Since Chinese authorities began to focus on the operations of cryptocurrency exchanges around this time last year, 88 cryptocurrency exchanges and 85 ICO projects have been shut down in the country. According to figures that were part of the original Shanghai Securities News piece, and related by The South China Morning Post, that crackdown has seen the yuan-bitcoin trading pair drop from accounting for 90% of total BTC trades, to less than 5%.