China has introduced its toughest regulations on bitcoin and other virtual currencies, as “mining” for domestic residents and all related virtual currency business activities, including foreign exchange services, are considered “illegal”.
on 24 septemberChina’s central bank, along with the Public Security Bureau and eight other departments, issued a joint notice specifying that all virtual currency-related business activities are “illegal financial activities”.
Influenced by China’s tough stance, the price of bitcoin took a massive drop at 4 p.m. on September 26, dropping nearly $2,000 in an hour; According to China’s web portal site Sina, crypto-currency exchange company Huobi saw 22,000 bitcoins, which is equivalent to $930 million, moved in two days.
China’s affairs expert Li Yanming told The Epoch Times that crackdown on virtual money should be part of the Xi Jinping regime’s overhaul of the financial system. “Competing with former leader Jiang Zemin’s faction [the] Xi still needs to plug loopholes for capital flows to prevent the risk of ‘money bags’, financial system volatility.
Chinese financial media East Money said that in early July, a rumor spread that Tether, the world’s largest stablecoin issuer, held reserve assets, including bonds or securities from China Evergrande, a real estate giant facing a debt crisis. is in.
But Tether denied the rumors in a statement, saying it did not have any debt or securities issued by Evergrande.
“Even if Tether does not specifically hold any of Evergrande’s short-term debt, it may have as big a risk as other Chinese obligations,” said Coindesk columnist David Morris.
In an article citing data from Tether, Reuters said that nearly half of Tether’s $62.8 billion in assets as of the end of June 2021 were backed by commercial paper and certificates of deposit.
financial system problems
Li said that on several occasions, the Xi Jinping regime has raised the problems of the financial system to the level of a criminal offense.
“Xi’s officials regard virtual currency as an unregulated money laundering path, because the secretive nature of virtual currency makes it less traceable to money laundering or foreign currency transfers,” Li said.
On September 18, the Supreme Prosecutor was posted to the Securities Regulatory Commission for the Treatment and Supervision of Securities and Capital Markets.
Since 2016, the Central Bank of China has imposed fines totaling $175 million on various payment institutions, Central Bank Vice President Fan Yifei said in a forum on September 24.
In a September 25 article, titled “Preventing Key Cadres from Hijacking by Interest Groups”, Baoshang Bank was linked to “dishonest financial groups” on the official site of the Discipline Inspection and State Supervision.
According to the Sound of Hope radio network report, Baoshang Bank is backed by Zeng Qinghong, a former leader of Jiang’s faction.
virtual currency ‘dig’ Industry
On September 24, the Development and Reform Commission issued a notice banning the investment and creation of virtual currency “mining” projects and other related activities.
Virtual currency mining uses computers to analyze the data, which then creates new bitcoins. It maintains a ledger of transactions on which bitcoin is based. Machines use large amounts of energy.
According to a report released in 2021 by the Development and Reform Commission, 19 out of 32 provinces were on red or yellow alerts on energy consumption and carbon emissions. Regions include Xinjiang District, Yunnan Province and Sichuan Province, where virtual currency “mining” industries are located.
Current political commentator Wei Tuo told The Epoch Times that the ban on virtual currency “mining” projects may be linked to the energy crisis. Recently, there was a massive power outage in many places in China.
“But more than an energy issue,” Wei said, adding that the ban on virtual currency actually began in early 2013, but many local authorities turned a blind eye to the “mining” industry because it could add local financial revenue.
“This time Xi decided to wipe out the entire virtual currency industry, which means virtual currency could affect financial stability and political security for Xi’s regime,” Wei said.
Migrant virtual currency platforms
Major overseas Chinese trading platforms such as Binance, Huobi and OKEx have stopped registration services for new users in mainland China.
On September 24, Sparkpool announced that it would be shutting down its mining pool service in China in line with the latest regulatory policy; BeePool said on September 28 that it would be shutting down mining pool services on October 15; Bitmain plans to suspend the sale of miners in China.
Looping said on September 26 that it would stop providing trade-related products and services to Chinese users; BHEX, BiONE and other small trading platforms announce their permanent closure; UP Fintech announced on September 29 that it would be gradually blocking Chinese customers who want virtual currency funds.
Even if the Chinese Communist regime’s firewall would block foreign websites from operating in mainland China, virtual currency trading in China would hardly be extinct, Wei said.
According to Wei, in 2017 when Beijing banned virtual currencies, some Chinese-funded virtual currency trading platforms moved their headquarters out of China, including Binance, Huobi and OKEx, but they did not move to China. Did not cut operations. Around 2018, all these platforms began to appear again in China, which conducted secret or semi-public activities.
This News Originally From – The Epoch Times