The Central Bank of China Reiterates All Crypto-related Transactions are Illegal

The Chinese government once again stepped up its suppression of cryptocurrency transactions. The Chinese Central Bank- People’s Bank of China (PBOC) stated that all cryptocurrency-related transactions are illegal.

On Friday afternoon, The People’s Bank of China (PBOC) released a statement and pointed out that virtual currencies such as Bitcoin, Ether, Tether, and other virtual currencies do not enjoy the same legal status as legal tender, are not legally repayable, thus should not be traded as circulating currencies in the market.

All crypto-related transactions, including services provided by offshore exchanges to domestic residents, are illicit financial activities, the PBOC said in the statement.

All overseas exchanges must not provide services to domestic investors and severely punish illegal financing activities related to cryptocurrencies. Related businesses such as virtual currency exchange business, intermediary services, pricing activities, issuance of tokens and virtual currency derivatives are strictly prohibited, and criminal responsibility will be pursued.

The notice from the People’s Bank of China mentioned that it will coordinate with various domestic departments to conduct a comprehensive monitoring mechanism from the central government to local territories, and improve the information sharing and rapid response mechanism.

The Chinese government said the administration is committed to building multi-dimensional and multi-level risk prevention and handling system, including the following keynotes:

• Financial institutions and non-bank payment institutions shall not provide services for virtual currency-related business activities
• Strengthen the management of Internet information content and access related to virtual currency.
• Strengthen the registration and advertising management of market entities related to virtual currency.
• Severely crackdown on illegal financial activities related to virtual currencies.
• Severely crackdown on criminal activities involving virtual currencies.
• Strengthen industry self-discipline management.

China reiterates that activities related to cryptocurrency are illegal financial activities, disrupting economic and financial order, and are prone to gambling, illegal fund-raising, fraud, pyramid schemes, money laundering, and other illegal and criminal activities, which seriously endanger the safety of the people’s property.

Image source: Shutterstock