China is one of the most hostile territories for digital currencies. The country, which tried to adopt blockchain while eliminating cryptocurrency from its public discussion completely, is now cracking down on the industry further. In a latest move, the government shut down some blockchain-related news accounts on Tencent owned social app WeChat. It has also banned hotels in downtown Beijing from hosting any events related to cryptocurrencies.
The country’s hawkish view on digital currencies is not new. In a series of crackdowns, it has wiped out the crypto mining industry, shut down crypto exchanges and made it tougher for citizens to buy these digital coins. In its recent move, it has banned at least eight crypto focused media outlets from spreading news via WeChat. Some of these outlets have raised millions of dollars in venture capital funds. The reason behind the shutdown was cited as a violation of the country’s new regulations.
Tencent issued a statement regarding the ban, saying that the accounts were “suspected of publishing information related to ICOs [initial coin offerings] and speculations on cryptocurrency trading.” It also said that the Cyberspace Administration of China had dictated social media operators to comply with the “public orders” and “national interests” on their platforms because of which the accounts were found in violation.
Jinse Caijing and Huobi News were among the top accounts banned in the process. However, their websites and apps are still in operation.
In another instance of compliance with the rules, the Chaoyang district in Beijing issued notices to several hotels, shopping malls and office buildings on August 17, banning them from hosting events related to cryptocurrencies. After the document was leaked this week, a local newspaper South China Morning Post confirmed the news of the ban with local authorities. One staffer at the district’s financial authority stated that the notice was sent after an overseas crypto exchanges organized a local event in the region last week. However, he suggested that the orders are restricted only to the district.
The nationwide crackdown, which is being reported in bits and pieces, is as draconian as it is ironical. For instance, China filed for the largest number of blockchain patents in the world last year and the number isn’t expected to decrease in 2018. Alibaba and JD.com, its top retailers and one of the wealthiest brands are now experimenting with blockchains and keeping up with the global level of innovation. However, cracking down on events, blockchain and crypto channels etc. goes on at the same time.
The government wants to make it clear to retail investors that crypto investments are not within their reach. Authorities fear than a widespread interest in digital currencies would topple the country’s financial stability. Media outlets that are talking about blockchains are now also being erased from public memory. They provided reviews on blockchain related projects (many of whom had their own native cryptocurrencies as well) and gave information about the latest technologies. They depend heavily on social platforms like WeChat and Weibo to dispense their messages to the users.