China to Close a Cryptocurrency Loophole

March 1, 2018

Chinese authorities, who have been tightening the regulation of cryptocurrencies over the year, are now targeting platforms that allow Chinese people to engage in cryptocurrency trading on foreign exchanges, anonymous sources familiar with the situation told Bloomberg.

Financial regulators of the country are reportedly planning to conduct a scrutiny of bank and payment system accounts of citizens and companies, who are suspected of trading cryptocurrency on foreign exchanges. Sources say that those who will be convicted in such activity may have their accounts freezzed and also be banned from country's financial system. 

These measures are aimed at depriving Chinese people of the rare remaining opportunities to buy cryptocurrency, as the local cryptocurrency exchanges were closed by the government in September 2017. At that time China was the most active cryptocurrency market, but this decision transferred the leadership to Japan. 

Some companies have been circumventing this ban and opened trading platforms in other countries. They allow Chinese citizens to buy cryptocurrency with their local bank or payment system account. However, trading volumes on such platforms and the amount of them are unknown. 

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