China's state-owned news agency appears to be stepping up rhetoric on over-the-counter (OTC) crypto trading and overseas initial coin offerings (ICOs), calling the blockchain use cases attempts to bypass domestic regulation.
In a news report published Feb. 12, the Xinhua News Agency detailed how purchasing cryptocurrency assets through OTC channels is easily available by having reporters register on exchanges such as Huobi Pro and buy bitcoin using accessible payment tools like AliPay.
As reported previously, following the ban on ICO and closure of order-book trading platforms last year, the country's domestic exchange platforms have shifted to OTC trading and largely moved their businesses overseas.
Yet, the new report by Xinhua, a ministry-level institution under the Chinese central government, notably arrives at a time when Chinese authorities are continuing to signal a desire to tighten rules to curb existing trading activities in the country.
Citing a report published by a Chinese internet finance security commission, the news agency stressed that as of November last year, more than 20 OTC exchanges have remained active through overseas domains such as Hong Kong, Japan and the U.S.
In addition, the report also pointed out crypto-to-crypto trading platforms that are based outside mainland China but available for Chinese investors, alleging that all these actions should be considered attempts to bypass the existing regulations.
Furthermore, it highlighted how some ICOs have shifted their registration overseas.
"Currently, some ICO projects moved overseas to continue its operation. Although they are officially established and issuing tokens overseas, their project development, key personnels and investors are all based inside mainland China," the report reads.
China national flag image via CoinDesk's archive
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.