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  • Writer's picturePaul Gravina

Why Ban Crypto in China?

China crypto ban, Cryptocurrency regulation in China, Chinese government and cryptocurrency, Risks of cryptocurrency in China, Impact of crypto ban in China,
Why Ban Crypto in China?

Cryptocurrency is a digital currency that uses cryptography to secure transactions and control the creation of new units. Cryptocurrency uses decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.

Crypto in China has been banned since 2017 when it was first introduced by the Chinese government. This occurred after an ICO (Initial Coin Offering) scam led to $3 billion being lost by investors who were not aware of what they were investing in or how much risk there was involved with these types of projects. The Chinese government then cracked down on all crypto-related activities including mining operations within their borders because they felt that this type of activity posed too much risk to their citizens' financial security

Regulatory Environment

The regulatory environment in China is a bit more complicated than in other countries. The People's Bank of China (PBOC), which is the country's central bank, has issued several statements regarding cryptocurrencies and their use. In December 2017, they released an official notice stating that all ICOs were illegal in China and that exchanges would be required to close their operations by September 30th, 2018 if they didn't meet certain requirements set forth by regulators.

In January 2018, another notice was issued stating that crypto exchanges were required to register with local authorities if they wanted to continue operating within China's borders after September 30th, 2018; however, this did not apply to over-the-counter (OTC) transactions between individuals or businesses because these types of trades are not considered financial services according to current regulations

Government Intervention

The Chinese government has been cracking down on cryptocurrencies for a while now. The main reason for this is to protect its citizens from fraud and scams, which are rampant in the crypto market.

In September 2017, China banned initial coin offerings (ICOs) in an effort to protect investors from getting scammed by ICOs that did not have any real value behind them. It also banned cryptocurrency exchanges from operating within its borders, but these bans were lifted in January 2018 after new regulations were put into place by regulators. However, these new regulations required all exchanges operating within China to register with local authorities before they could resume operations - something that many companies had yet to do as of May 2019 when this article was published!

Risk Factors

While cryptocurrencies are a new and exciting innovation, they also come with risks. The potential negative impacts of crypto include:

Fraudulent activity

Illegal activities like money laundering and tax evasion

Security breaches that lead to identity theft or financial losses

The Chinese Crypto Ban

The Chinese government has banned cryptocurrency trading, ICOs, and even the mining of cryptocurrencies. This means that any person or organization in China can't invest in cryptocurrencies or trade them. The ban was announced by the People's Bank of China (PBoC) on September 4th, 2017, but it wasn't until January 2018 that things started getting serious.

The impact has been immediate; Bitcoin prices dropped by over 30% after the news broke out and have never recovered since then. However, there are still some ways around this ban if you want to buy cryptocurrencies from within China:

Local exchanges such as Huobi Pro allow users to trade Bitcoin through its platform even though they don't provide any services related directly to cryptocurrency transactions;

Some people use VPNs to access foreign exchanges like Binance;

You can also use peer-to-peer platforms like Localbitcoins where sellers will meet buyers face-to-face instead of using an exchange platform

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