China State News Calls for 'Iron Fist' Regulation of Bitcoin Exchanges

China's Xinhua News Agency has defended regulators' recent decision to outlaw token sales and the exchange closures that followed.

AccessTimeIconOct 4, 2017 at 2:30 p.m. UTC
Updated Sep 13, 2021 at 7:00 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The Chinese government's media arm, the Xinhua News Agency, has defended regulators' recent decision to outlaw token sales, or ICOs, and the voluntary closure of bitcoin exchanges that followed.

Heavily critical of cryptocurrency exchanges, Xinhua said they had become a favourite among criminals across the world in an article today. Exchanges, it continued, are known to have "concocted pyramid schemes" and "engaged in illegal activities" – criminal activity "disguised as scientific and technological innovation."

The solution? These entities must be met with "iron fist governance," according to the news agency, which also praised authorities' "zero tolerance" to the financial risks and illicit activities.

The article follows a statement by authorities in early September, which prohibited the sale of blockchain tokens as a method of fundraising. In the following month, a number of exchanges, citing the statement, announced they would voluntarily close their doors.

Xinhua argued that, even following the crackdown, there are still many "regulatory vacuums" that authorities need to address, in part because of the global use of cryptocurrencies.

Solutions suggested by the agency – which is often considered the voice of the government – include strengthening existing regulations and establishing a full regulatory framework for exchanges with specific requirements, such as a cap on large volume trading, ID verification, and know-your-customer and anti-money laundry procedures.

Xinhua News Agency has previously written articles collecting instances of bitcoin fraud.

Wolfie Zhao also contributed reporting

Newspapers image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.