It's the latest big news for cryptocurrencies, as China's government takes drastic action against digital trading and mining. Get the latest news below.
October 12th, 2021
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China’s top regulators have intensified a crackdown on cryptocurrencies, banning both trading and mining in the country. The move marks the first time that 10 of the country’s top regulators and agencies have joined forces to ban crypto-related activity.
The news follows an announcement in May that financial institutions and payment companies were banned from providing services related to cryptocurrency transactions. Similar bans were also issued in 2013 and 2017.
The People’s Bank of China (PBOC) has said that cryptocurrencies must not circulate in the country and that overseas exchanges are barred from offering their services to investors that are based in China. In addition to this, financial institutions, payment companies, and internet firms are now all barred from facilitating cryptocurrency trading nationally.
The move comes as part of a global cryptocurrency crackdown, with governments from Asia to the United States currently worried about the fact that highly volatile and privately owned digital currencies could undermine their control of monetary systems, increase systemic risk, promote financial crime, and hurt investors.
In addition to this, Chinese government agencies have repeatedly raised concerns that cryptocurrency speculation could disrupt the country’s economic and financial order, which is one of Beijing’s top priorities.
Discussing the move, the PBOC said that the government will “resolutely clamp down on virtual currency speculation... to safeguard people’s properties and maintain economic, financial and social order”.
On top of this, China’s National Development and Reform Commission said it will work to cut off financial support and electricity supply for mining, which it said spawns risks and hampers carbon neutrality goals.
Earlier this year, virtual currency mining had been big business in China, accounting for more than half of the world’s crypto supply. However, since then, miners have been moving overseas. As a result, it’s estimated that China will lose around $6 billion of annual mining revenue, which will instead flow to remaining global mining regions like Russia, the United States and Kazakhstan.
Across the world, more and more governments and companies are becoming concerned about fraud and other risks prevalent in the cryptocurrency market.
In our latest Crypto Fraud Report, we found that the cryptocurrency market is subjected to the highest fraud rate when compared to other industries that Veriff works with. In fact, in 2019 alone, cyber criminals were able to siphon away $4.26 billion from cryptocurrency users and exchanges.
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