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China pledges to crack down on bitcoin mining and trading

Berita 24 English - China will tighten controls on bitcoin mining and trading as part of its efforts to ward off financial risks, the State...

Berita 24 English
- China will tighten controls on bitcoin mining and trading as part of its efforts to ward off financial risks, the State Council's Financial Stability and Development Committee announced on Friday.
Additionally, the country will crackdown on illegal securities market activity and ensure the stability of the stock, bond, and forex markets, the committee stated during a meeting presided over by Vice Premier Liu He.

The statement, which comes just days after three Chinese industry bodies tightened their prohibition on banks and payment companies providing crypto-related services, signals a significant escalation of anti-virtual currency measures.

Liu is the highest-ranking Chinese official to issue a public call for a crackdown on bitcoin. This is the first time the state council has specifically targeted crypto mining activities.

Bitcoin prices fell sharply again in response to the news and are on track to lose more than 15% weekly, Etherium.

Investor protection and money laundering prevention are top priorities for governments and financial regulators as they consider whether and how to regulate the cryptocurrency industry.

Hong Kong previously proposed that the city's market regulator license cryptocurrency exchanges and restrict their operations to professional investors.

"While some level of crypto regulation is unavoidable, these excessively restrictive policies will stifle opportunity and drive the industry out of Asia," said Jehan Chu, managing partner of Hong Kong-based blockchain venture capital firm Kenetic Capital.

CCTV, China's state broadcaster, warned Friday against the "systemic risks" associated with cryptocurrency trading in a commentary posted to its website.

"Bitcoin is no longer a risk-averse investment vehicle. Rather than that, it is a speculation instrument. "According to the broadcaster, cryptocurrency is a loosely regulated asset that is frequently used in illegal trade, money laundering, arms smuggling, gambling, and drug dealing.

According to some estimates, virtual currency mining is a lucrative business in China, accounting for up to 70% of the world's crypto supply. However, others assert that the percentage has decreased in recent years.

China's crackdown on mining "will have profound consequences for global cryptocurrency markets," according to Winston Ma, an adjunct professor at NYU Law School and author of the book "The Digital War."

Chinese cryptocurrency mining rig manufacturers, such as Canaan Inc and Ebang International Holdings, also saw their shares fall in New York.

China has prohibited cryptocurrency exchanges and initial coin offerings but has not prohibited individuals from owning cryptocurrencies.

The statement added that China's prudent monetary policy will be flexible, targeted, and appropriate while maintaining the yuan exchange rate essentially stable at reasonable and balanced levels.

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