China Announces Ban On External Cryptocurrency Exchanges

Many people in the crypto space have been waiting for news out of China on proposed regulations and how their government planned on attempting to combat financial risks that have been perceived about the crypto market.

So, news out of China is that they are planning to add offshore cryptocurrency exchanges and ICO websites to their Great Firewall, according to the South China Morning Post on February 5, 2018.

The reason for this update is because financial regulators were frustrated with the violation of existing measures that are in place on domestic exchange websites so they made the move to ban foreign exchange sites citing a desire to mitigate financial risks, as well.

This is most definitely a move to completely quash the cryptocurrency market in China and stop anyone living in China from participating in or investing in anything at all related to crypto.

Beijing has cracked down the hardest on cryptocurrency traders and investors after seeing incidents of fraud at retailers that accept cryptocurrency as payment and high volatility that could potentially cause local social unrest within the community after some local ICOs lost investors a considerable amount of money in their portfolios in the months of December and January.

Ultimately, it seems that Chinese officials are nervous that the crypto environment will cause tension and unrest so they are aiming to just get rid of it entirely before anything tragic may happen (according to them anyway).

Previous Changes

Back in January of this year, we saw crackdowns happen on peer-to-peer trading platforms and over-the-counter crypto sources that resulted in mass bans to add to the previous bans from September 2017 on crypto-to-fiat currency trading and ICOs.

Many that live in China have noticed that marketing campaigns and various advertisements relating to cryptocurrency that had previously been fairly visible have been pulled from public view and virtually disappeared.

Coming Up Later

There doesn’t seem to be any concrete news on how China plans to handle cryptocurrency mining at this point but there has been much speculation surrounding this topic. More to come on that particular topic, I am most certain of this.

Regulators are also looking to find the ways that traders in China have been using to go around the trading ban and use the foreign platforms anyways and then shut those methods down to prevent further usage.

How Will This Affect Crypto As A Whole?

According to many financial experts in China, many crypto investors are Chinese and have held fairly large stakes in many ICOs that have launched recently. This block could potentially drag the crypto market down further than where its at now.

Some investors have responded by relocating to Japan or Singapore in order to continue their investing while others have turned to using Virtual Private Networks (VPNs) that help mask their location and allow them to still trade cryptocurrency while living in China.

Going forward, it seems that Chinese regulators plan to attempt to crack down on anyone violating the crypto ban within the borders of China including via the use of VPNs so we will have to wait and see what happens with that.

What do you think about the new regulations and how do you feel the crypto market will be affected by this fairly drastic change?

If you found this valuable, please leave some claps to show some love and share with your friends. Thanks for reading!

-Ivy-

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