The Chinese government published a draft regulation on Dec. 31 stating that no organization or individual is allowed to provide internet marketing for illegal financial activities, which include cryptocurrency transactions.
Fast facts
- The regulation, drafted by the People’s Bank of China — China’s central bank — and other Chinese government institutions stipulates that any organization or individual is not allowed to provide internet marketing services for illegal financial activities, which include “virtual currency transactions.” The draft is published for public opinion until Jan. 31.
- The Chinese government has been taking a hard stance on cryptocurrencies since its crackdown on crypto mining in May 2021. On Sept. 24, China declared all cryptocurrency transactions illegal. In a case in Beijing last December which involved a dispute over Bitcoin mining equipment, the local court ruled that a Bitcoin mining contract was “void.”
- Multiple internet marketing scams involving cryptocurrencies have been reported in China in recent months. On Dec. 24, a cross-border internet scam was reported in Sichuan province, which involved more than 500 victims and over US$22 million, where scammers based in Cambodia and the Philippines lured Chinese citizens into investing in cryptocurrencies. After more than a year of investigation and trials, 590 people involved in the case have been prosecuted and sentenced.