China announces ‘crackdown’ on Bitcoin mining and trading

Cryptos mentioned on lists of risks to financial system to be avoided

China has again signalled deep antipathy to cryptocurrency, this time calling for a crackdown on Bitcoin mining.

Last Friday the State Council Financial Stability and Development Committee, a body charged with managing risk in China’s financial system, issued a statement detailing its most recent meeting and conclusions about the most pressing risks it needs to manage.

After first mentioning less-specific issues such as building early warning systems to detect financial risks, and reforming smaller financial institutions, the statement said it’s time to “crack down on Bitcoin mining and trading behaviour” as the cryptocurrency and other risks mentioned could introduce external risks, or inflation, or both.

The Committee’s identification of Bitcoin as undesirable came just days after China’s Internet Finance Association, Banking Association, and the Payment and Clearing Association issued a joint statement banning banks from offering access to cryptocurrency investments, while web platforms were barred from hosting crypto companies’ operations or even ads for their wares.

The new statement didn’t specify what actions would be taken against Bitcoin operators, other than saying China will “severely punish” illegal activities. However, the impact of the ban is likely to be felt outside China, as the nation is one of the major sources of miners.

The Financial Stability and Development Committee’s statement is also notable because the risk mentioned before Bitcoin was “supervision of platform enterprises’ financial activities”.

That’s a reference to China’s ongoing restriction of financial services activities conducted by its local web giants. The most visible sign of China’s displeasure with financial forays by its web companies was the cancellation of Ant Group’s colossal IPO. Clearly the likes of Alibaba, Tencent, and Baidu aren’t going to be allowed to explore further financial services ventures without scrutiny.

Bitcoin took another dip after China's new announcement, taking its value down by more than 25 percent over the last seven days. Many other cryptocurrencies have followed suit. ®

Similar topics

Other stories you might like

  • GPL legal battle: Vizio told by judge it will have to answer breach-of-contract claims
    Fine-print crucially deemed contractual agreement as well as copyright license in smartTV source-code case

    The Software Freedom Conservancy (SFC) has won a significant legal victory in its ongoing effort to force Vizio to publish the source code of its SmartCast TV software, which is said to contain GPLv2 and LGPLv2.1 copyleft-licensed components.

    SFC sued Vizio, claiming it was in breach of contract by failing to obey the terms of the GPLv2 and LGPLv2.1 licenses that require source code to be made public when certain conditions are met, and sought declaratory relief on behalf of Vizio TV owners. SFC wanted its breach-of-contract arguments to be heard by the Orange County Superior Court in California, though Vizio kicked the matter up to the district court level in central California where it hoped to avoid the contract issue and defend its corner using just federal copyright law.

    On Friday, Federal District Judge Josephine Staton sided with SFC and granted its motion to send its lawsuit back to superior court. To do so, Judge Staton had to decide whether or not the federal Copyright Act preempted the SFC's breach-of-contract allegations; in the end, she decided it didn't.

    Continue reading
  • US brings first-of-its-kind criminal charges of Bitcoin-based sanctions-busting
    Citizen allegedly moved $10m-plus in BTC into banned nation

    US prosecutors have accused an American citizen of illegally funneling more than $10 million in Bitcoin into an economically sanctioned country.

    It's said the resulting criminal charges of sanctions busting through the use of cryptocurrency are the first of their kind to be brought in the US.

    Under the United States' International Emergency Economic Powers Act (IEEA), it is illegal for a citizen or institution within the US to transfer funds, directly or indirectly, to a sanctioned country, such as Iran, Cuba, North Korea, or Russia. If there is evidence the IEEA was willfully violated, a criminal case should follow. If an individual or financial exchange was unwittingly involved in evading sanctions, they may be subject to civil action. 

    Continue reading
  • Meta hires network chip guru from Intel: What does this mean for future silicon?
    Why be a customer when you can develop your own custom semiconductors

    Analysis Here's something that should raise eyebrows in the datacenter world: Facebook parent company Meta has hired a veteran networking chip engineer from Intel to lead silicon design efforts in the internet giant's infrastructure hardware engineering group.

    Jon Dama started as director of silicon in May for Meta's infrastructure hardware group, a role that has him "responsible for several design teams innovating the datacenter for scale," according to his LinkedIn profile. In a blurb, Dama indicated that a team is already in place at Meta, and he hopes to "scale the next several doublings of data processing" with them.

    Though we couldn't confirm it, we think it's likely that Dama is reporting to Alexis Bjorlin, Meta's vice president of infrastructure hardware who previously worked with Dama when she was general manager of Intel's Connectivity group before serving a two-year stint at Broadcom.

    Continue reading

Biting the hand that feeds IT © 1998–2022