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China says all cryptocurrency transactions are illegal and launches huge bitcoin crackdown

·1-min read
China says all cryptocurrency transactions are illegal and launches huge bitcoin crackdown

All crypto-related transactions are illegal, China’s central bank has said.

The statement is the latest and most extreme intervention from the People’s Bank of China, amid an ongoing crackdown on bitcoin and other digital currencies in the country.

After having enjoyed a mostly positive day until the announcement, the value of cryptocurrencies dropped immediately after the news was announced. Bitcoin fell almost 6 per cent in an hour, for instance.

The latest statement from official says that any business activities using digital currencies are illegal. Pointing to digital currencies such as Bitcoin, Ethereum and Tedacoin, it says that all crypto is not “legal compensation and should not and cannot be used in the market as money”.

It also covers companies that are operating exchanges, financial institutions that buy and sell cryptocurrencies, or other kinds of transactions.

And the notice from the central bank also bans overseas exchanges that offer similar services to people who live in China, over the internet.

It does not, however, seem to ban the possession of cryptocurrencies.

As with other recent statements from Chinese officials, the latest notice from the central bank notes that “speculation” in digital currencies is on the rise, and that it is used for criminal activities such as “gambling, illegal fund-raising, fraud, pyramid schemes, money laundering” and more. It also says that it is “seriously endangering the safety of people’s property”.

It also warns, as it has in the past, that virtual currency is not legal tender and that anyone participating in speculation around it will be forced to bear any losses themselves.

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