Regulators in China have begun blocking social media accounts belonging to cryptocurrency exchanges that continue to offer services to customers located on the mainland.
China Blocking Cryptocurrency Exchanges on Social Media
On Tuesday Beijing-based media outlet Caixin reported that local authorities had forced social messaging platform WeChat to shut down accounts belonging to select cryptocurrency exchanges in a bid to further restrict the ability of mainland residents to trade cryptocurrencies.
As CCN reported, China had forced the closure of domestic cryptocurrency exchanges that offered fiat-to-cryptocurrency trading pairs last September, but some investors told Caixin that they were still able to access the offshore platforms. Other traders moved to over-the-counter (OTC) and peer-to-peer (P2P) platforms, often using social media to find trading partners and execute transactions.
Consequently, authorities began monitoring internet traffic to offshore exchanges, particularly those which had originally been headquartered on the mainland. Officials have reportedly suggested that banks should suspend service to clients found to have engaged in cryptocurrency trading under the pretense of preventing pyramid schemes, money laundering, and other fraudulent activities the government has attributed to cryptoassets.
Though a minor development overall, this move to freeze cryptocurrency exchange accounts indicates that regulators desire to further stifle the domestic cryptocurrency trading industry, which once dominated the global marketplace.
CCN has not been able to confirm which exchange’s WeChat accounts have been closed and which continue to be operational.
CPPCC Member Floats State-Controlled Digital Asset Exchange
Notably, this move to further restrict trading follows a report that a high-ranking member of the Chinese People’s Political Consultative Conference (CPPCC) has called for the country to establish a state-controlled digital asset trading platform that would allow “enterprises to raise funds [and] trade digital assets.” It is not clear whether such an exchange — if created — would list cryptocurrencies.
Chinese officials and state-run media outlets have also lauded the potential of blockchain technology in recent weeks while also stating that these networks’ decentralized applications should be limited and always built on a centralized foundation.