The People’s Bank of China in Shenzhen applied a series of actions to clean up companies due to suspicious crypto trading operations.
China and its crackdown on the crypto industry are not over. Recent reports indicate that the People Bank of China (PBoC), the central bank, continues to take action against companies in the sector. On this occasion, those affected were companies located in the Chinese province of Shenzhen.
According to state-owned news outlet Shanghai Securities Journal, the Shenzhen branch of the People Bank of China took action to clean up at least a dozen companies in that area for allegedly trading cryptocurrencies illegally.
Although the publication did not bring further details on how the companies got punished, or even the names or occupations of these firms, the medium detailed that the central authority planned to rectify at least 11 companies that faced suspicions of carrying out activities of illegal digital currency.
PBoC Cleans Cryptocurrency Companies
According to the report, the actions against cryptocurrency companies in Shenzhen took effect in conjunction with a series of far-reaching measures against illicit cross-border trading of currencies and stocks. The authorities’ primary goal was to find a well-known local financial website that would be offering suspicious advertising of illegal currency deposit operations.
The Shanghai Securities Journal report continued suggesting that the People’s Bank of China plans to carry out a pilot project to train financial customers on technology and risk prevention.
Shenzhen government has taken a strict approach to go after crypto companies before. In late 2019, a report by local news outlet Sanyan Finance stated that authorities in the province had discovered the identity of a total of 39 exchanges that were in breach of China’s cryptocurrency trading ban.
The operation also included the PBoC, as well as the Office of Economic Investigation of the Municipal Office of Public Security and the Municipal Administration of Communications; although the exact penalties that would take effect to said companies have not been either revealed.
China’s crackdown Has Not Stopped
The news about the persecution of digital asset companies in Shenzhen comes amid a further crackdown on cryptocurrencies in China. While trading in digital currencies has been illegal in the Asian nation for several years, this year, the country’s authorities have taken a more strict approach against all the companies in the sector.
The approaches are aimed mainly against the miners, who have had to close and move their cryptocurrency extraction operations to foreign countries. The actions of the Chinese government have generally had a major impact on the local crypto mining industry, as well as on the Bitcoin network.
According to data from the University of Cambridge, China’s contribution to Bitcoin’s mining power (global hash rate) has fallen below 50% this year after peaking at 75.53% during 2019.
While the possession of cryptocurrencies has never been completely banned, the Chinese state has gradually increased restrictions on the industry since 2017. This year, China’s council of ministers, the State Council, called for a crackdown on cryptocurrency mining.
By: Jenson Nuñez
