China has banned cryptocurrencies in various ways over the years. People who use cryptocurrencies are now considered criminals.
China’s relationship with Bitcoin (BTC) and cryptocurrencies has been tense over the years. The activity seems to be partially legal. But this relationship appears to be reaching an end, as China has repeatedly tightened bans.
The most recent ban was a piece of advice by the People’s Bank of China, the largest central financial institution in that country, to remind all its citizens (and the world) that Bitcoin and cryptocurrencies are not allowed in their territory.
Any citizen or business that makes transactions would be engaging in illegal behavior, and would receive sanctions according to the laws, the authorities warned today.
In May 2021, China has prohibited Bitcoin at least seven times. The restrictions keep impacting various aspects of the use of cryptocurrencies, as well as in their markets.
The first restriction arrived early in 2013 when bitcoin was still fresh and was taking its first steps, and there were not many alternative cryptocurrencies.
On that occasion, the restrictions got applied against banks so that they did not allow transactions related to cryptocurrencies, like a purchase of BTC by bank transfer, for example.
Last June, the government again prohibited banks from allowing these transactions, which generated a commitment on these institutions to avoid said measure.
Also, in May 2021, institutions and payment applications stopped offering any service that would allow activities with cryptocurrencies. The market volatility of these assets got considered as one of the risks that justified the measure.
This type of justification has also appeared to apply the law. Due to a presumption of money laundering with cryptocurrencies, the authorities unveiled 380 groups and captured 2,400 suspects.
According to the authorities in charge of the case, the funds in cryptocurrencies had their origin in telephone fraud.
Bitcoin Exchanges got Banned from China
Another way to ban the use of BTC by China has been through merchants and businesses that use cryptocurrencies as payment methods. China has blocked the access point for products and services that bring users closer to cryptocurrencies.
Such is the case with cryptocurrency exchanges, which got banned in 2017. Since then, exchanges like Huobi and Binance have decided to distance themselves from China and base operations in other regulatory territories.
However, the authorities have followed up on this situation, and this month, access to the Binance website got blocked, preventing users in China from maintaining operations on this site.
Advertising on Bitcoin Banned in China
Recently, in July 2021, the authorities explained in detail that activities related to cryptocurrencies are prohibited, including trade shows, advertising pieces, and other activities and services. The companies have complied with the policies.
In this sense, it is also vital to consider the bans on holding public events on cryptocurrencies in hotels and shopping centers. The same problem has happened with ICOs (Initial Coin Offers), which got banned in 2017, but in February 2021, the ban acquired more strength due to a decree that came into effect in May.
By: Jenson Nuñez
