TL;DR Breakdown
- China central bank clampdown on 11 firms for engaging in illegal crypto activities.
- China clampdown on crypto has taken massive toll on crypto industry.
The Peoples Bank of China (PBOC) has again clampdown on 11 firms based in Shenzhen for engaging in ‘illegal cryptocurrency activity.’
Shanghai Securities Journal, a state-owned media firm, reported that the Shenzhen branch of the PBOC plans to “rectify” those 11 companies that were “suspected” of “carrying out illegal virtual currency activities.”
The firms were alleged by the PBOC of violating foreign exchange rules and running a crypto service despite a nationwide ban.
The report also noted that the PBOC would advocate for enlightening financial consumers about technology and preventing risk.
China has been big on the crypto ban in recent months. This clampdown comes just weeks after the PBOC ordered the closure of a Beijing-based software provider Beijing Qudao Cultural Development Co Ltd, for providing crypto trading services.
PBOC crypto ban and booming crypto economy in China
The severe clampdown on both crypto exchanges and crypto mining firms in China has taken a serious toll on the booming mining ecosystem in China and the entire crypto space in the country.
In the heat of the crypto ban in China, the news led to a sharp fall in the prices of Bitcoin at that time until the market recovery being experienced currently.
China previously held two-thirds of the global mining industry last year. However, with the recent clampdown, the figure has dropped below 50 percent, according to data from Cambridge University.
In the wake of the clampdown, the PBOC issued an edict to banks and other payment companies, ordering them to cease any crypto-related business. Over-the-counter businesses were also hit in China as financial institutions were ordered to stop servicing them.
The continued clampdown on the crypto sector in China has led to an uproar among stakeholders in the country as authorities continue to go more rigid on the crypto in the country.
From the onset, China has taken a tough stand against crypto until the recent clampdown, which is largely argued that it is a strategy to eliminate competition for its digital yuan set to launch.
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