Chinese Province Regulators Warn on Illegal Crypto Fundraising Schemes

Hainan's regulators stated their warning was in line with the existing nationwide ban on cryptocurrencies.

China’s southern Hainan province has issued a warning against operators who run illegal cryptocurrency-related fundraising schemes, as the country keeps strengthening its tough stance against the industry. According to Reuters, citing local media outlet, Nanguo Metropolis, financial regulators from the island province, including branches from the People’s Bank of China (PBoC), have cautioned on illegal crypto activity across the zone.

“No organization or individual in Hainan Province shall illegally engage in token issuance and financing activities; any so-called token financing platform shall not engage in the business of exchange between legal tender and tokens or ‘virtual currencies’, and shall not buy, sell or act as a central counterparty to buy or sell tokens,” the regulators stated.

Moreover, authorities issued another warning targeted to financial institutions forbidding them not to directly or indirectly provide their services with crypto platforms whatsoever, reminding them of the existing rulings about the long-lasting nationwide virtual currencies ban.

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Recent China Crackdown on Crypto Mining

During a Financial Stability Committee of the State Council meeting held last month, China’s Vice Premier, Liu He, specifically mentioned that the country will clamp down the crypto mining and trading activities. The official cautioned on the ‘potential risks’ that crypto markets carried for investors and enhanced the government’s harsh rhetoric towards the industry.

Although there has been a ban on cryptos in China since 2017, the country is one of the largest Bitcoin mining hubs. In fact, there are reports on the Chinese crypto mining industry taking a share of around 70% globally. “We should crackdown on bitcoin mining and trading activities and prevent individual risks from being passed to the whole society,” Liu said in regards to recent China’s crackdown.

Such recent statements from the Chinese officials helped fuel the recent sell-off seen in the crypto markets, specifically on Bitcoin prices across the board.

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