The People’s Bank of China (BPC) and nine other government institutions, including the Internet regulator, recently called all activities related to crypto assets illegal.
The main financial entity and other official entities referred particularly to activities related to “money laundering, illegal fundraising, fraud or pyramid schemes,” and ratified the serious situation to which the owners of the companies are exposed. properties.
They explained in the statement that the “offenders will be investigated for their criminal responsibility in accordance with the law” and that they will apply inexorable actions “against the speculation of virtual currencies and related financial activities.” However, they did not indicate “how the laws will be applied to the alleged offenders.”
The BPC referred to bitcoin, ethereum and other cryptocurrencies, issued by non-financial entities, indicating that they are not the same as legal tender and therefore are prohibited in the market. Additionally, in the statement, the entities demand a higher level of “supervision” from the local authorities in order to prevent and exclude speculative risks.
As expected, the news had a negative impact on virtual currencies, generating a drop of 8.6 % in bitcoin and 9.27 % in ethereum, which subsequently balanced, reaching an average of 6 % respectively.
Since 2013, the Chinese government has been repetitive in the prohibition “of the use and mining” of cryptocurrencies, alleging the excessive use of energy. The current decision marks “the seventh time that Beijing has taken restrictive measures against activities with virtual currencies.”
There are many analysts and expert personalities who “distrust” the words issued by the government entities of the Asian country. For the executive director of the ARK36 Cryptocurrency Hedge Fund, Ulrik K. Lykke, “although each time it happens, the markets react with a fall in prices, the effect is smaller and shorter. That is why the story that China bans bitcoin already has an almost meme status in the community.”
Meanwhile, the representative of the Luno firm, Vijay Ayvar, expressed in his Twitter social network account: “China has banned these currencies more times than one can count.”
On the other hand, experts such as Craig Erlam, an analyst at the Oanda exchange, highlights a change with respect to the previous measures because offenders run the risk of being prosecuted.