It has been a while since we last heard about Chinese officials attempting to regulate bitcoin. It appears the China Securities Regulatory Commission – or CSRC – is looking to shut down illegal cryptocurrency exchanges moving forward. This could spell disaster for some of the trading platforms in the country which have been operating without a license for some time now.
CRSC Cracks Down on Illegal Bitcoin Exchanges
It was to be expected Chinese regulators would not take kindly to illegal cryptocurrency exchanges. Ever since January of this year, all local exchanges have been under increasing scrutiny. A new meeting was held a few days ago to determine how the situation needs to be addressed moving forward. it looks like a set of new criteria has been established for all financial platforms in the country.
To be more specific, all scrutinized exchanges can suffer from one of four different consequences. Rebranding and merging are the two most positive options for affected companies. Rectification could be problematic, but it will not cause any exchange to shut down either. The bigger problem is how various exchanges will face getting shut down by the government in the future. Any exchange failing to comply with rectification requirements will be shut down regardless.
It appears the CSRC is particularly concerned about micro-trading platforms. These platforms exist on WeChat and other popular platforms. They allow users to invest and trade different stocks and assets. It is unclear if Bitcoin is involved in these trades, although it does not appear unlikely. Micro-trading platforms are officially considered to be “illegal” and “underground” investment schemes, which can cause significant financial losses.
It is evident this new regulation does not favor Bitcoin exchanges by any means. Most cryptocurrency platforms are not in line with the principles outlined by the CSRC. This could prove to be quite disastrous for the overall ecosystem in China. For now, it remains to be seen if Bitcoin will be affected. If it is, however, things could look very bleak a few months from now.
JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC, The Merkle, Samsung Insights, and TransferGo.