China State TV: OTC Bitcoin Platforms May Violate Law

Wolfie Zhao
Nov 29, 2017 at 16:10 UTC
NEWS

China's crypto exchanges may be violating financial regulations by facilitating peer-to-peer trading between Chinese yuan and cryptocurrencies.

At least that's according to commentators on China Central Television (CCTV), who, in a segment that aired on its Financial Channel this week, discussed the volatility of bitcoin and its recent rally above $10,000.

Citing a notable growth of China's OTC trading as one possible reason behind the surge, the program went on to raise concerns about the practice. As an illustration, a screen capture of Huobi Pro's website was shown to viewers that demonstrated the peer-to-peer trading and step-by-step guidance for new users.

Yet, in interpreting the statement from the People's Bank of China in September on banning initial coin offerings (ICOs), financial columnist and a TV personality Li Cangyu went so far as to state the the feature tries to bypass law enforcement and violates the specific rule whereby the PBoC prohibited any exchange from facilitating the trading between cryptocurrency and fiat currency.

Another commentator, Wan Zhe, a chief economic from China National Gold Group Corp., a central state-owned company that manages gold mining in the country, also echoed Li's opinion.

"Not every peer-to-peer trading is necessarily illegal. But, providing a how-to guide and a middle-man platform to bridge the trade clearly violate the rules without any doubt," Wan added.

Huobi has yet to respond to requests for comments on the accusation.

The broadcast outlet, CCTV, is a state-owned channel and one of the official mouthpieces of the government and the China Communist Party. Although the program itself revealed no official statement from the government, it nonetheless delivers a notable message and gives insight into how the state media portrays the cryptocurrency among its national audience.

As reported previously, following China central bank's ban on ICO and suspension on crypto trading with the Chinese yuan, major exchanges in the country including Huobi and OKCoin have shifted the business focus overseas to their respective peer-to-peer trading platforms – Huobi Pro and OKEx.

Allowing mainland Chinese residents to buy and sell major cryptocurrencies using Chinese Yuan through bank wires, WeChat and Alipay, the two platforms are based out of Hong Kong, a special administrative region outside the mainland China's jurisdiction.

Elsewhere in the program, the usual arguments about bitcoin's high volatility and the benefits of the blockchain technology were also discussed, while the commentator Wan also made counterfactual claims by saying Amazon now accepts bitcoin as a payment method.

China flag image via Shutterstock

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