Following false fears of a Bitcoin ban in India, the FUD storm continues as China looks to completely eradicate cryptocurrency trading—but can they succeed?
Chinese FUD Strikes Again
It’s been a rough month for Bitcoin and the cryptocurrency market. The price of the dominant cryptocurrency has dropped below $8,000, and many altcoins have suffered even more significant losses, following a seemingly endless flood of FUD (Fear, Uncertainty, and Doubt) from mainstream media outlets.
Now, it appears the FUD of the day is that China, already notoriously unfriendly towards cryptocurrency, is ready to block all access to cryptocurrency trading websites and initial coin offerings (ICOs) by utilizing its notorious Great Firewall of China.
The troublesome story comes primarily from Financial News, a publication affiliated with the People’s Bank of China (PBOC), which is quoted as stating:
To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs.
Since then, advertisements for cryptocurrencies have reportedly stopped appearing on both Baidu and Weibo—China’s largest search engine and social media platform, respectively.
Scaling the Wall
Though China continues to be an enemy of cryptocurrency, it remains to be seen whether or not their increased measures have a greater effect than their already-instituted domestic ban.
According to the South China Morning Post, the PBOC-affiliated article admitted that recent attempts to eradicate digital currencies by shutting down domestic exchanges haven’t worked as well as planned, quoting:
ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions. Overseas transactions and regulatory evasion have resumed.
The Financial News’ article also spins the planned ban as being for the protection of the country’s citizens, stating:
Risks are still there, fuelled by illegal issuance, and even fraud and pyramid selling.
China has already banned ICOs and domestic cryptocurrency exchanges, but many eager investors inside the country have found workarounds. According to Donald Zhao, a Bitcoin trader who moved to Tokyo following China’s domestic ban, China’s new regulations might succeed in making it even harder for individuals to circumvent the law:
It is common for people to use VPNs [virtual private networks] to trade cryptocurrencies, as many exchange platforms relocated to Japan or Singapore … I think the new move literally means it would be even harder to circumvent the ban in China … people promoting related business programmes may be arrested.
Still, where there’s a will, there’s a way, and people who really want to trade cryptocurrencies will likely figure out how to do so in secret.
Though stricter regulations in China aren’t going to help the market recover any faster, it’s worth mentioning that other countries are set to benefit. According to Cathay Capital’s Ace Yang:
It’s positive news for Japan and Singapore, because demand for participating in trading is not diminishing and traders have got to go somewhere.
What do you think about China’s claim to increase measures against cryptocurrency trading? Do you think it will have any long-term effects, or is it just another case of FUD? Let us know in the comments below!
Images courtesy of Shutterstock, Bitcoinist archives.