Chinese authorities issue joint warning on cryptocurrency trading

Several regulatory agencies in Beijing issued a joint warning that reminded individuals and companies not to engage in cryptocurrency trading and related activities. The warning came after authorities noted signs of resurgence in the crypto trading niche.

The cryptocurrency trading risk warning was issued on Friday by authorities based in the Chinese capital, The Block reported. These entities include the Beijing Banking and Insurance Regulatory Bureau, the Business Management Department of the People’s Bank of China, The Beijing Securities Regulatory Bureau, and the Beijing Local Financial Supervision and Administration Bureau.

According to the warning, the recent popularity of blockchain technology in China appeared to have awakened the public’s interest in cryptocurrency trading activities once more. The authorities reminded everyone that some of the platforms might have “seriously violated” rules banning initial coin offerings (ICO).

The statement also reiterated that firms are not allowed to promote cryptocurrency platforms or projects. Firms are also reminded that they are not allowed to offer any type of service related to cryptocurrencies nor engage in crypto trading business themselves.

The group also urged the public to report violations to existing laws and regulations governing cryptocurrencies and ICO. In addition, potential investors are advised to remain rational so they won’t be deceived by promises of potentially high returns.

Since 2017, Chinese authorities have imposed stringent measures against crypto-related activities by forcing exchanges to shut down and banning ICOs. Beijing’s Municipal Bureau of Finance also ruled that using a security token offering for fund-raising activities is illegal.

While the Chinese government is banning crypto trading, it also plans to launch its own stable digital currency, according to Benzinga. The project is expected to be in its pilot phase next year.

China is very strict when it comes to cryptocurrency but it’s a totally different story when it comes to blockchain technology. China is actually leading in the field and has submitted three times more patent filings on blockchain technology compared to the U.S., Nikkei Asian Review reported.

China received 7,600 patent applications for blockchain technology between 2009 and 2018 based on data from Tokyo’s research firm Astamuse. The total number of patent applications worldwide for the same period is around 12,000, which means that 63% of all applications came from China.