Compliance
Major Cryptocurrency Platform To Shut Mainland China Accounts - Report
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The development highlights the wide spectrum of regulatory treatments of cryptocurrencies.
A major cryptocurrency exchange, Huobi Global,
reportedly said that it will shut all user accounts in mainland
China by the end of the year, following shortly after the country
said that it was banning transactions in such
instruments.
Over the weekend, the group, which operates from offices in
Singapore, South Korea, the US and other countries, said that it
has stopped allowing new customers in mainland China to register
accounts (Wall Street Journal, 26 September). The
exchange will also retire existing accounts in China by the end
of 2021 to ensure the safety of its customers’ assets, it is
quoted as saying.
This news service was unable to find a reference to the
announcement on Huobi Global’s website, or obtain contact
information for the business. It may update this news story in
due course.
Reports have noted that another large cryptocurrency exchange,
Binance, is to start blocking account registrations using China
cellphone numbers.
Beijing’s crackdown on bitcoin and other digital currencies is
all of a piece with its wider moves against forms of fintech ie
after-hours/for-profit education, video gaming, and other
sectors. The country’s Communist Party rulers say they fear a
rise of a Western-style culture marked by heavy wealth inequality
and over-exposure to socially disruptive technologies. (Some
observers might argue that the crackdown is a way for the CCP to
protect its power.) The country also faces the more traditional
brick-and-mortar saga around the crisis-hit Chinese property
developer, Evergrande.
China started to suppress cryptocurrency mining in 2017, and its
actions demonstrate how there is a varied patchwork of regulatory
approaches to bitcoin and other entities around the world. At the
other end of the spectrum, El Salvador now accepts bitcoin as
legal tender. In the US, the Securities and Exchange Commission
thinks of cryptocurrencies as securities with investors
having to report realised gains and losses from crypto
investments on their annual tax forms. Swiss regulators and
policymakers are broadly positive on cryptocurrencies. Crypto
mining and exchanges for cryptos are legal in the Alpine state
but they must be regulated by FINMA, the federal watchdog. In
Canada, where a number of cryptocurrency exchanges operate,
although crypto assets can be traded they are not considered as
legal tender.