Sunday, October 24, 2021

China shuts down cryptocurrency, wants money laundering crackdown

Written by CNN Staff

Following reports that the country is preparing to ban all cryptocurrency trading, China has officially expressed concerns about the anonymity that bitcoin offers, which it argues can be used for illegal or illegal activities.

On Wednesday, China’s central bank, the People’s Bank of China, said it had carried out a national analysis of the so-called bitcoin economy and found that transactions in bitcoin trade “has yielded illegal or harmful results.”

The country’s cyberspace administration and the country’s central bank, the People’s Bank of China, had jointly released the report on Wednesday. The report said that from December 2017, there had been an “unusual rise in the number of bitcoin transactions of currency value” — with every week during that period seeing a new high.

“There are evidences that cryptocurrency exchanges in China are facilitating illegal or harmful activities,” the CBP said.

Cryptocurrency players who are not subject to currency control regulations may be issuing fake invoices, the CBP said.

“Online stores that use bitcoin and other anonymous payment channels for online sales of goods may profit from illegal schemes and illegal financial activities, as they don’t have to reveal their ownership.”

The regulator also said it had concerns that the use of bitcoins’ anonymity and lack of transparency could open the door to money laundering and any violations of tax legislation.

“We are closely studying the development of cryptocurrencies, but we will not take any new steps unless we determine that their development could harm social security,” the CBP said.

Following the release of the report, shares in Chinese digital currency exchanges tumbled. BTC China — the country’s largest — saw its share price drop by more than a third Wednesday before closing down by almost 43%. BTC Hong Kong also slumped 36%, while EOS — which does not track bitcoin’s value and has said it’s more at home on the blockchain platform given its lack of vulnerability to hacks — saw its shares lose almost a quarter of their value.

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