Written by Lubomir Tassev, edited by Jeanine
Following the closing of social media accounts of crypto news organizations and after forbidding hotels from hosting crypto-related events, China has turned its attention to banning payments to trading platforms based outside the country. We’ve covered the escalation of the crackdown in The Daily. Also, Russia’s Interior Ministry wants to introduce criminal liability for shadowy crypto activities and UK’s financial watchdog has updated its crypto scam warning.
China to Block Payments to Foreign Crypto Exchanges
After banning ICOs and domestic crypto-yuan trade last year, and recently cracking down on crypto–media and venues hosting events in the space, China is taking another step to further tighten the noose on the crypto sector. According to local media reports, Chinese regulators have announced intentions to curb online payments for cryptocurrency to overseas exchanges.
A Chinese regulatory body responsible for monitoring online financial risks now wants to investigate transactions to 124 trading platforms, many of which are Chinese-run businesses that moved abroad following the ban imposed in September, 2017. According to Xinhua, the agency noted that domains and IP addresses of websites located outside of the People’s Republic could be banned in order to decrease the number of people using them. The next step would be to apply control measures in regards to China-based companies providing transaction services to local residents.
In early July, the People’s Bank of China announced that in result of the 2017 ban bitcoin (BTC) trading in renminbi (RMB) had dropped to less than 1 percent of the total global volume. According to the central bank, the restrictions on cryptocurrency trading with the Chinese yuan and crowdfunding prompted the exodus of 88 virtual currency exchanges, including some of the world’s leading trading platforms like Binance and Huobi, and dozens of Chinese ICO projects.
Criminal Liability for Shadowy Crypto Activities Proposed in Russia
As part of the ongoing tuning of the upcoming crypto regulatory framework in Russian, the federal government in Moscow has been discussing the possible introduction of criminal liability for shadowy circulation of cryptocurrency, local media reported. According to official documents obtained by Izvestia, the Ministry of Internal Affairs has asked the Finance Ministry for its opinion on the matter. The Ministry of Economic Development, however, thinks it’s too early to talk about criminal liability related to the turnover of cryptocurrencies which is not yet legalized and regulated.
Three crypto bills were adopted on first reading by the lower house of Russia’s parliament, the State Duma, in May. Deputies tried to synchronize the drafts and eventually postponed the final voting for the next parliamentary session this fall. Now the Interior Ministry (MVD) has decided to join the debate – it wants to propose some corrections in the legal texts regarding the circulation of open source cryptos like bitcoin and ethereum. MVD pushes for mandatory registration of crypto entities with relevant government agencies that implement financial and tax regulations along with the establishment of criminal liability for any shadowy activities in the sector.
UK Financial Watchdog Updates Scam Warning for Brits
UK’s Financial Conduct Authority (FCA) has recently updated its warning on crypto investment scams amid rising number of complaints and reports. Admitting that cryptocurrencies such as bitcoin and many related activities are not currently regulated in the United Kingdom, the watchdog, nevertheless, notes that some types of crypto-products may involve regulated investments and the firms that sell them may need authorization. In the latest version of the document, the FCA educates the public on how crypto scams work and advises Brits about how to protect themselves and what to do in case they’ve been targeted by scammers.
The regulator points out that crypto fraudsters often advertise on social media using images of celebrities or well-known figures to promote cryptocurrency investments. The ads lead to professional-looking websites and the scams, usually based abroad, claim to have an office in London. “Be wary of adverts online and on social media promising high returns on investments in cryptocurrencies or cryptocurrency-related products,” the FCA warns, noting that most firms advertising and selling crypto investments are not authorized to do so in Britain.
This is not the first warning pertaining to cryptocurrencies issued by the FCA. In November 2017, the regulator cautioned retail investors who may be considering or soliciting cryptocurrency contracts for difference (CFDs), emphasizing the risks associated with price volatility and transparency, as well as charges and funding costs which may manifest in the cryptocurrency CFD markets. In September last year, the authority published a warning regarding initial coin offerings (ICOs).
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