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You better watch out. You better not cry… If you use crypto and live in Shanghai…
Shanghai Seeks to Shut Down Crypto Businesses
As we get ready for the upcoming holiday season and familiar carols roll through our heads, so do thoughts of crypto, and in China, the digital currency industry is taking another blow to the gut. The government of Shanghai has announced that it will be looking into all cryptocurrency-related activities – such as tokens and trading – to see which crypto businesses need to be “shut down.”
This is a bad omen for the crypto space, but it also comes at a very odd time – one in which China, over the past few weeks, has been recorded “being kind” to cryptocurrency and blockchain. The country’s own president Xi Jinping has commented that blockchain has the power to reinvigorate the country’s economy and rebuild its infrastructure. He has also commented that he’s looking to improve blockchain innovation within China’s borders.
Furthermore, the country’s legislators have finally agreed to allow bitcoin mining to continue. For several months, the topic had been up in the air, and it was widely rumored that China was considering a full-on ban of cryptocurrency mining activities due to the potential hazards they presented to the environment. However, it seems like those fears have finally subsided.
China has also passed a new law that would make it easier to build a state-backed digital currency shelled out by the nation’s central bank.
Now, however, the region of Shanghai seems to be exhibiting a very hostile attitude towards crypto and businesses that delve in it. The announcement was made on November 14 that government officials representing both the People’s Bank of China (PBOC) and the Shanghai Municipal Financial Regulatory Bureau would soon be investigating blockchain and crypto-related businesses and conclude a final analysis by November 22.
These government officials are required to examine businesses that “conduct cryptocurrency trading, token sales, and distribution of tokens” through initial coin offerings (ICOs) potentially conducted via overseas methods. As we all remember, China banned both ICOs and foreign crypto exchanges in 2017 and 2018 respectively, which suggests that some businesses are looking to conduct sales outside the extent of the law.
Crypto Getting a Bad Rap
All companies caught conducting such sales will be reported to both the bank and the regulatory bureau and will be forced to close their doors permanently.
Attacks seem to be hitting cryptocurrency businesses via social media as well, with Chinese social media site Weibo banning all correspondence relating to crypto exchanges such as Binance and companies like the Tron Foundation, claiming that both institutions failed to abide by Weibo’s present content laws. At press time, however, the specific details of these alleged violations have not been provided.