China Shuts Down 11 Crypto Exchanges in Shenzhen
China's central bank has announced that it has "cleaned up" 11 crypto exchanges in Shenzhen.
Key Takeaways
- The People's Bank of China has shut down 11 cryptocurrency exchanges in Shenzhen.
- The bank said the exchanges were violating foreign exchange rules and operating in the city despite a country-wide ban.Â
- China has recently taken a hard stance against cryptocurrencies, but traders can still buy Bitcoin on overseas exchanges.
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China’s central bank has cracked down on 11 crypto exchanges operating in Shenzhen.
PBOC Closes Shenzhen-based Exchanges
The Shenzhen branch of People’s Bank of China has closed down 11 unnamed entities running cryptocurrency exchanges and enabling cross-border stock trading services, Shanghai Securities News reported Tuesday.
In the report, PBOC was quoted as saying it “cleaned up” the crypto exchanges, which are considered to be operating illegally in the country. The exchanges were allegedly violating foreign exchange rules and running a crypto service despite a nationwide ban.
In a similar incident in July, China’s central bank ordered the closure of a Beijing-based software provider Beijing Qudao Cultural Development Co Ltd for providing crypto trading services.
Crypto exchanges are not allowed to operate in China, and financial and payment companies have been prohibited from providing crypto-related services. However, the government has not made it illegal for individuals to hold crypto.
While the PBOC has not disclosed names of the firms that faced action, reports say that one of the targets was a “well-known domestic financial website.” The bank said it was planning an education program for retail customers with the aim of protecting them from risks.
The news comes as China’s central bank has been heavily promoting its central bank digital currency (CBDC), called e-CNY. The PBOC has tested the CBDC in pilot programs across various Chinese cities, including Shenzhen.
In June 2021, China executed an intense crackdown on Bitcoin mining, causing several farms in China to stop operations. The government also blocked access to crypto exchanges to control capital outflows from the economy.
In response, exchanges like Huobi and BTCChina announced that they would be winding down their operations in China. Despite the domestic crackdown, traders in China can still purchase Bitcoin through overseas platforms such as Binance.
According to journalist Colin Wu, also known as Wu Blockchain, Binance has resumed the registration of Chinese phone numbers after a two-week pause.
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