Chinese Central Bank Cracks Down on Major Cryptocurrency Traders

The Yuan Renminbi is the fiat currency of the People's Republic of China.

In the wake of China releasing its digital Yuan, and weeks after the Chinese legislature passed new regulations more favourable to cryptocurrency in the country, Decrypt reported that the Chinese central bank has begun blacklisting central cryptocurrency traders.

The People’s Bank of China has begun flagging accounts using large sums of cryptocurrency in their transactions. According to WuBlockchain, this is part of a broader crackdown by Beijing on money laundering and other illicit financial practices. The PBoC earlier this year announced its project to eradicate illegal earnings from the Chinese economy. Thus, it has started monitoring and flagging accounts in which conspicuous amounts of capital are located.

Cryptocurrency exchanges and traders have paid a big price for this drive, as crypto transactions often involve millions of dollars. This means they immediately trigger the suspicions of official financial institutions in China.

According to WuBlockchain, although the anti-money laundering drive was initiated by the PBoC, the central bank delegated the mechanisms to individual banks and authorities to implement. This has resulted in a very firm approach taken by banks and others tasked with implementing the campaign.

Once a bank flags and properly assesses the suspiciousness of an account, it reports it to a regional PBoC office. Banks all over China then receive information of blacklisted accounts. The holders of those accounts are then unable to open new accounts anywhere in the country.

Many Bitcoin dealers have been closing their doors over supposedly targeted harassment by the Chinese authorities. The lack of uniform regulations on cryptocurrency could reportedly make Bitcoin easily blacklisted in an account due to its high value.

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Raïs Tarek 87 Articles
Journalist and lawyer, with a passion for global politics, economics and current affairs.