China’s central bank – the People’s Bank of China (PBoC) – says all crypto exchanges and peer-to-peer (P2P) trading platforms on the mainland have now been shut down. But it appears that authorities are still waging a battle against crypto mining, as many proponents are said to have moved their activities underground.
Lanjinger reported that the PBoC released its latest quarterly report for fiscal year 2021, in which it made a number of claims about the success of its crackdown on cryptocurrencies launched last September.
The PBoC claimed that it had “cracked down on illegal and criminal financial activity” in an effort to “clean up the financial mess.” The PBoC claimed it had eliminated “unlicensed internet-based wealth management institutions and unlicensed payment institutions” and “equity crowdfunding platforms.”
“All” forms of P2P online lending platforms, including crypto-related platforms, have “ceased operations,” it added.
In addition, the authors of the bank’s report claimed that domestic “virtual currency trading platforms and token issuances” have been shut down, while access to crypto and currency trading platforms overseas has also been “blocked.”
The PBoC claimed that its actions helped reduce the risk of “shadow banking” and remove unhealthy forms of uncertainty from the economy.
But it is proving difficult to eradicate cryptocurrencies in a country that was once the sector’s center of gravity. According to GWI data from 2018, a staggering 31% of Chinese internet users were using virtual private networks (VPNs) at the time, while more recent data is unavailable. And while authorities have tried to discourage the use of VPNs by fining users nearly $150 for using the software, remarks made by an athlete at the Beijing Winter Olympics seem to indicate that VPN use is alive and well in the Middle Kingdom.
The remarks came from U.S.-born Chinese gold medalist in freestyle skiing, Eileen Gu, who claimed on social media that “anyone can download a VPN” in China, according to the transcript. The post appears to have been censored or deleted, suggesting that VPNs are still a sore spot for Chinese cyberpolice.
Although crypto trading has become more difficult than ever, many Chinese Bitcoin (BTC) enthusiasts are believed to remain active in the market, using VPNs and stablecoins such as Tether (USDT) as a gateway. Over-the-counter trading (OTC) is also said to be alive and well.
And despite claims that crypto mining has been shut down, it appears that the battle against miners is far from over. CLS reports that Guotai Junan Securities, one of China’s largest securities firms, recently issued a notice warning its employees that they will be punished if they mine crypto.
State bodies last year found that a whopping 21% of illegal crypto mining in China can be traced back to state-owned firms and offices. The media outlet published a copy of an internal note from the securities firm warning:
“Employees are strictly prohibited from participating in virtual currency mining activities in any form. Employees are also required to pay attention to the security of personal office computers to prevent them from becoming infected with [crypto] mining viruses.”
Meanwhile, in an official post, the city of Xinzhou, in Shanxi Province, announced that it had set up a reporting network for residents to anonymously tip off police about suspected crypto mining activities in their neighborhoods.