China’s most powerful regulators on Friday intensified the country’s crackdown on cryptocurrency with a blanket ban on all crypto transactions and mining, hitting bitcoin and other major coins and pressuring crypto and blockchain-related stocks.
Ten agencies, including the central bank as well as banking, securities and foreign exchange regulators, vowed to work together to root out “illegal” cryptocurrency activity, the first time the Beijing-based agencies have joined forces to explicitly ban all cryptocurrency-related activity.
China in May banned financial institutions and payment companies from providing services related to cryptocurrency transactions, and issued similar bans in 2013 and 2017. The repeated prohibitions highlight the challenge of closing loopholes and identifying bitcoin-related transactions, though banks and payment firms say they will support the efforts.
Friday’s statement is the most detailed and comprehensive yet from the country’s most powerful regulators, underscoring Beijing’s commitment to suffocating the Chinese crypto market.
“In the history of crypto market regulation in China, this is the most direct, most comprehensive regulatory framework involving the largest number of ministries,” said Winston Ma, NYU Law School adjunct professor.
The move comes amid a global cryptocurrency crackdown as governments from Asia to the United States fret that privately operated highly volatile digital currencies could undermine their control of the financial and monetary systems, increase systemic risk, promote financial crime and hurt investors.
They also worry that “mining,” the energy-intensive process through which bitcoin and other tokens are created by high performing computers, is undermining global environmental goals.
Chinese government agencies have repeatedly raised concerns that cryptocurrency speculation could disrupt the country’s economic and financial order, one of Beijing’s top priorities.
Analysts say authorities also see cryptocurrencies as a threat to China’s own sovereign digital-yuan, which is at an advanced pilot stage.
“China has been known to go to extremes with either very assertive statements and prosecutions to complete radio silence,” said George Zarya, CEO of Bequant crypto exchange in London.
“This time the point was made very clear that China will not support cryptocurrency market development as it goes against its policies of tightening up control over capital,” he said.
The People’s Bank of China (PBOC) said cryptocurrencies must not circulate and that overseas exchanges are barred from providing services to mainland investors. It also barred financial institutions, payment companies and internet firms from facilitating cryptocurrency trading nationally.
The Chinese government will “resolutely clamp down on virtual currency speculation, and related financial activities and misbehavior in order to safeguard people’s properties and maintain economic, financial and social order”, the PBOC said.
Bitcoin , the world’s largest cryptocurrency, dropped more than 9% to $40,693 on the news, having earlier been down about 1%.
Smaller coins, which typically rise and fall in tandem with bitcoin, also tumbled. Ether fell 10% while XRP dropped a similar amount.
Friday’s statement comes after cabinet vowed in May to crack down on bitcoin mining and trading as part of a broader effort to mitigate financial system risks, without going into details. That threat sent cryptocurrencies tumbling, with bitcoin alone slumping 30% in a day. Friday’s news dashed hopes among many in the industry that the May crackdown would be short-lived.
“This is the manifestation of the crypto mining and trading crackdown announcement by China’s central government back in May,” said Ma.
The move also hit cryptocurrency and blockchain-related shares.
U.S.-listed miners Riot Blockchain (RIOT.O), Marathon Digital (MARA.O) and Bit Digital (BTBT.O) slipped between 6.3% and 7.5% in premarket trading. China-focused SOS dropped 6.1% while San Francisco crypto exchange Coinbase Global (COIN.O) fell 3.4%.
“There’s a degree of panic in the air,” said Joseph Edwards, head of research at cryptocurrency broker Enigma Securities.
Bitcoin and other cryptocurrencies are mined by high-powered computers competing to solve complex mathematical puzzles in an energy-intensive process that often relies on fossil fuels, particularly coal.
The National Development and Reform Commission said that it will work to cut off financial support and electricity supply for mining. Such activities contribute little to China’s economic growth, spawn risks, and hamper carbon neutrality goals, it said.
Virtual currency mining had been a big business in China before May, accounting for more than half the world’s crypto supply, but miners have been moving overseas.
“The losers in all of this are plainly the Chinese. They will now lose around $6 billion worth of annual mining revenue, all of which will flow to the remaining global mining regions,” including Kazakhstan, Russia and the United States, said Christopher Bendkisen, head of research at digital asset manager CoinShares.
![Rev. Fr. Anthony Odiong, a US-based Nigerian Louisiana Catholic priest, was arrested in Florida on Tuesday for possessing child pornography, according to law authorities. The suspect is reportedly accused of many other cases of sexual assault. The Waco, Texas, Police Department announced in a Facebook post on Tuesday that officers detained Father Anthony Odiong in Ave Maria, Florida, with assistance from the United States Marshals Service. Waco police announced in March that they had received "credible information" about a sexual assault allegedly committed by Odiong in Texas in 2012. “During the subsequent investigation, a case of possession of child pornography was uncovered,” the police said. The priest was apprehended in Florida by the Caribbean Regional Fugitive Task Force. The Waco Police Department said that he will be extradited to Texas. Odiong had previously served in the Archdiocese of New Orleans before being removed as priest in December of last year due to controversy over homilies in which he claimed, among other things, that the Catholic Church was being taken over by "the gays." At the time, the priest was also accused of abusive behaviour; a Louisiana lady claimed in U.S. bankruptcy court that Odiong had committed both financial and sexual abuse against her. Prior to joining the New Orleans Archdiocese, Odiong served in at least two Texas parishes. On Tuesday, Waco police stated that during their sexual assault investigation, "the presence of other survivors was revealed." “Multiple women have come forward to tell similar experiences as the sexual assault survivor who reported the initial allegation,” the police department said. “Survivors’ experiences ranged from sexual assault and indecent assault, more commonly recognised as groping, and financial abuse, with some survivors experiencing every element of Anthony Odiong’s manipulation.” The police said they “believe there may be more survivors, and we wish to speak with anyone who [has] had similar encounters” with the priest. The Archdiocese of New Orleans issued a brief news release on Tuesday noting Odiong's arrest in Florida. The archdiocese “encourages anyone with any information to contact law enforcement,” the release said.](https://chronicle.ng/wp-content/uploads/2024/08/ezgif-6-4730550ede-450x300.jpg "Odiong: US-based Nigerian Catholic priest convicted over sexual assault")
