China’s central bank has provided insight into fraudulent blockchain schemes and how to avoid falling prey to them. It also asked retail investors to report criminal clues to relevant departments.
Don’t Believe The ‘Blockchain’
On Friday, August 24, the People’s Bank of China, along with four other regulators, warned about illegal fundraising, pyramid schemes, and frauds prevalent under the banners of ‘blockchain’ and ‘financial innovation’ in the virtual assets space.
The regulators have outlined three different features of such fraudulent fundraising schemes:
A rough translation of the warning from the regulatory bodies read:
The general public should be rational about the blockchain, […] establish a correct monetary concept and investment philosophy, effectively raise the awareness of risk, and actively report the illegal criminal clues found to the relevant departments.
Alipay to Counter OTC Crypto Trading
China’s popular payments app Alipay has extended support to Chinese regulators to track and monitor its user’s accounts doing over-the-counter (OTC) crypto trading using the Alipay mobile app. Alipay has more than 400 million registered users on its platform and is operated by Alibaba affiliate Ant Financial.
A local publication quoted Ant Financial as saying:
All along, Alipay will resolutely retreat for merchants involved in virtual currency transactions; for personal accounts suspected of virtual currency transactions, according to the circumstances, resolutely take measures to limit account collection or even permanently limit collections.
Last week, a slew of regulatory announcements came from China to further steer ahead its drive of nullifying all crypto-related activities in the country. A government order was initially issued to shut down all crypto-related communication channels and commercial activities taking place in the country. This was apparently not enough since China also banned 124 websites providing offshore crypto trading services to the Chinese locals.