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China Says It Has ‘Safely’ Shuttered ICOs, Cryptocurrency Exchanges

Last Updated March 4, 2021 5:06 PM
Samburaj Das
Last Updated March 4, 2021 5:06 PM

Chinese financial authorities, including the central bank and other regulators, are ramping up their broad crackdown on illegal fundraising activities.

In a news conference in Beijing on Monday, Chinese authorities said they will keep a close watch on interest rates charged by companies and financial firms in the private sector to increase their scrutiny on illegal fundraising.

In particular, the People’s Bank of China, the country’s central bank, said it will continue to curtail risks from financing over the internet after stating it had ‘safely closed down’ all initial coin offering (ICO) platforms and cryptocurrency exchanges in the country, Reuters reports .

As reported previously, China first issued a blanket ban on all domestic ICO platforms on September 4, 2017, quickly following the ruling with restrictions to effectively shutter the domestic cryptocurrency trading industry.

China’s crypto clamps last year largely began early in January, soon after bitcoin hit a then-celebrated high of $1000 at the time. The move has largely neutered China’s influence on global cryptocurrency prices after once accounting for over 90% of trading as recently as 2016.

However, research from China’s internet finance association revealed that Chinese citizens were continuing to participate in crypto trading through exchanges and ICO platforms overseas. In February, a PBoC-affiliated newspaper revealed Chinese authorities were moving to block all websites, both domestic and foreign, related to cryptocurrency trading and ICOs.

In what is effectively seen as its final crackdown, Chinese authorities began targeting domestic crypto traders by checking their bank accounts with the added threat of having their assets frozen and even blocking them from the domestic financial system. All of which has seen Chinese authorities largely curtail crypto trading, even if they’ve come short of completely eradicating it altogether.

Meanwhile, financial scams involving illegal fundraising is particularly rampant in China, raking in an estimated $36.5 billion (251.1 billion yuan) in 2016, spread over 5,000 new criminal cases according  to a Chinese state-run news agency. Over 30 percent of those cases were found to related to private investment platforms.