Bitcoin Exchanges Lack Legal Foundation, China Internet Finance Association Says
A self-regulatory body in China focused on online finance has issued a new warning on bitcoin exchange risks.
A self-regulatory association in China focused on digital finance has issued a new warning on cryptocurrency trading activities.
In a statement released today, China's National Internet Finance Association (NIFA) asserted that cryptocurrencies like bitcoin have become a tool for speculation among investors, while also serving as a payment conduit for illegal fundraising and money laundering. Although a self-regulatory organization and not a regulatory agency itself, NIFA was first initiated in 2015 by the People's Bank of China and approved by the State Council.
The release comes just under two weeks after NIFA published a warning on initial coin offerings, or ICOs, which itself was followed by a ban on the funding model by Chinese regulators. Exchanges and other services focused on ICOs have since moved to halt operations or shut down entirely in the wake of that decision.
Of note is the comment that trading platforms for cryptocurrencies in China are not legally sanctioned, with the organization stating:
The notice came days after reports emerged that China's regulators are reportedly moving toward new restrictions on the country's cryptocurrency exchanges. Thus far, however, no official announcement has been seen from either the People's Bank of China or other agencies within the government.
Major exchanges in China, including Huobi, BTCC and OKCoin, still continue operating, while others are exiting the market citing the regulatory concerns.
Image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
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.