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China Crackdown: After Beijing, Guangzhou Hub Bans Cryptocurrency Events

Last Updated March 4, 2021 3:34 PM
Samburaj Das
Last Updated March 4, 2021 3:34 PM

The Guangzhou Development District, a special economic zone in southern China with a close proximity to Hong Kong, has reportedly banned all promotional events related to cryptocurrency as the country’s crypto crackdown continues.

One of China’s earliest special economic zones installed to encourage and foster businesses with less-restrictive laws, the Guangzhou Development District issued a notice on Friday to forbid cryptocurrency events in the district, the South China Morning Post  reported on Wednesday.

The ban is a move toward “maintaining the security and stability of the financial system,” an excerpt from the notice reasoned.

The notice follows a similar ban mandated by authorities in Beijing’s Chaoyang district on August 17. The order warned office buildings, hotels and shopping malls in the central district of China’s capital against hosting any events promoting cryptocurrencies.

On Friday, a joint public notice from a number of prominent Chinese watchdogs and authorities including the central blasted initial coin offerings (ICOs), a radical form of fundraising powered by cryptocurrencies that have been outlawed in China and other ‘illegal’ crypto crowdfunding. Operators using terms like “financial innovation” or “blockchain” to solicit investments are actually conducting “fraud, pyramid schemes” the regulators warned.

Today’s reported ban and the public warning form an ever-intensifying crackdown by Chinese authorities into the domestic cryptocurrency sector. Cryptocurrency trading activity in China has already been dented, severely, following scrutiny into exchanges from early 2017 that eventually led to the shuttering of exchanges within the country.

China’s censorship policies have also put the brakes on crypto-related transactions through private messaging and peer-to-peer financial platforms. Last week, Tencent’s WeChat Pay and Alibaba’s AliPay – two of China’s most popular payment apps with over a billion users between them – blocked users from sending or receiving funds related to cryptocurrencies.

China’s so-called ‘great firewall’ is also taking measures to block the country’s citizens from accessing the websites of over 120 cryptocurrency exchanges overseas. This week, China’s biggest search portal Baidu moved to restrict or place a complete ban on all crypto related discussions within Baidu Teiba, a popular Reddit-like online forum.

Guangzhou city image from Shutterstock.