Report: Chinese Regulators Discuss Draft Rules With Bitcoin Exchanges

A new report indicates that Chinese regulators are in talks with bitcoin exchanges over potential AML and KYC rules.

Mar 17, 2017 at 8:40 p.m. UTC
Updated Sep 11, 2021 at 1:10 p.m. UTC

China's bitcoin exchanges may soon be required to implement new and potentially onerous processes to ensure know-your-customer (KYC) verifications.

According to a report by Caixin, the People's Bank of China has issued a discussion paper to domestic exchanges on which it is seeking comment for proposed requirements. The procedures are part of a broader effort by the central bank to standardize policies at exchanges and stamp out money laundering and other financial crimes.

According to the report, the document details both a standardization of anti-money laundering (AML) policies and the establishment of a customer identification system.

First-time users, the report indicates, will need on-site certification in order to deposit funds. Prospective users will then be required present identification at the time of registration. For customers doing ¥50,000 (over $7,200) in volume or more, a remote video certification will be required for identity authentication.

The paper also stipulates that there must be senior management personnel responsible for AML procedures, including reporting questionable transactions.

The new rumors come in the wake of the PBoC's January decision to intervene in the domestic bitcoin market amid what was then a period of heavy market volatility.

Since that time, the interactions have seen bitcoin exchanges implement a number of new policies, ending margin trading and freezing withdrawals for digital currencies.

At press time, withdrawals were still frozen across domestic exchanges.

China flag image via Shutterstock

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