HomeBlockchain InfrastructureChina Issues Official Warning Against Fake Cryptocurrency Schemes

China Issues Official Warning Against Fake Cryptocurrency Schemes


Following what’s reportedly the biggest Bitcoin heist in China, the Government and other major institutions have issued an official warning against fake cryptocurrency schemes.

Prompting Investors to be Careful

The Banking Regulatory Commission, the Ministry of Public Security, the People’s Bank of China, the General Administration of Market Supervision, and the Ministry of Public Security have issued a formal public warning against fake cryptocurrency schemes.

In a bulletin dated August 24th, the institutions warn that “lawless elements” have been using the terms “blockchain”, and “financial innovation” to solicit investments in the form of “digital assets”, “virtual assets”, and “virtual currency.”

The warning also reiterated that such activities aren’t based on the underlying blockchain technology but rather on “speculative blockchain concepts” which are used for “illegal fundraising, pyramid schemes, and fraud.”

The warning also noted that tracking the raised money is difficult because the funds are usually stored overseas.

Rough Weeks for China

The public warning comes just a few days after Chinese police arrested three men who are allegedly connected to what’s purportedly the biggest Bitcoin heist in the country.

LiveBitcoinNews reported August 20 that Chinese police enforcement has imprisoned three men for stealing over $87 million.

Just a couple of days later, on August 22, China tightened its cryptocurrency crackdown by targeting accounts of popular messenger app WeChat. Reportedly, the country closed some public accounts because they had violated the local regulations governing instant-messaging services.

A statement of WeChat was cited by the South China Morning Post which said that reasons for the suspension were because they were:

…suspected of publishing information related to ICOs [initial coin offerings] and speculations on cryptocurrency trading.

What do you think of China’s move to issue a formal warning against fake cryptocurrency schemes and to tighten its grip on the industry? Don’t hesitate to let us know in the comments below!

Image courtesy of ShutterStock


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