China Is Poised for Another Crypto Trading Crackdown as Speculation Returns

Published on by Coindesk | Published on

Financial regulators in China appear set to crack down on cryptocurrency trading again after President Xi Jinping's praise for blockchain technology revived speculation in the sector.

Regulators in each district of Shanghai must search and inspect local crypto exchange-related services before Nov. 22 and report to the central bank for further actions, according to an official notice signed by the Shanghai Internet Finance Rectification Agency and the Shanghai Bureau of the People's Bank of China.

The move underscores China's complicated relationship with emerging decentralized technologies.

In his speech earlier this month, President Xi called on his countrymen to "Accelerate the development of blockchain technology," and China has long been a favored location for bitcoin miners.

According to the notice, regulators in each district of Shanghai are required to look for any entity that is organizing virtual currency trading activities inside China, or ICOs using a blockchain.

Promotional and brokerage services inside China for ICO projects that are registered outside of the country also fall under the inspection scope of the local financial regulators.

Caixin said speculation on crypto has reemerged in China following President Xi's speech earlier this month.

China's social media platform Weibo has banned users from publishing any posts that contain "Blockchain" and "Crypto trading" at the same time.

The Shanghai government's notice also comes at a time when some exchanges are expanding their local presence to tap into the Chinese market.

Binance, which has a dedicated team in Shanghai, recently rolled out peer-to-peer trading on its platform that enables users to buy or sell cryptocurrencies using Chinese yuan through bank wires, AliPay or WeChat.

x