Paper Dragon Plaque: NBK crashed bitcoin on 10% expansion of the ban on the circulation of cryptocurrencies – Bits Media

The People's Bank of China issued a circular, which expands the ban on transactions with cryptocurrencies for business and recognizes them as illegal financial activities.

According to the regulator, any business operations using cryptocurrency instruments, but also mediation activities, related to exchange, provision of information and consulting services, recognized as illegal financial activity in China. Violation may result in criminal liability. After the publication of this document, Bitcoin and most altcoins collapsed within 10%

Services of foreign cryptocurrency exchanges are also included in the category of prohibited operations., provided to Chinese citizens. Legal entities, non-profit organizations and individuals, who know or should know, that they are doing business, related to virtual currency, and still provide them with marketing, payment and settlement, technical support and other services, will be held accountable for offenses.

The situation is not nearly as bad, as presented in many media, and the NBK didn’t even say anything significantly new. The document published by the Central Bank of China does not prohibit citizens from owning and directly exchanging cryptoassets, if it does not relate to commercial activities, as well as conducting investment activities outside the country.

but, if the investment activity of a legal entity, non-profit organization or individual violate public order and customs, then the corresponding civil legal acts will be declared invalid, the perpetrators are brought to justice according to the law, and losses, arising in connection with this, will also be assigned to them.

Bits.media comment

The market reaction to the new PBOC ban was quite modest compared to previous Chinese dragon attacks., and this is quite understandable. In fact, this is only an extension of previous bans, clearing the way for the widespread introduction of the digital yuan, and it was expected.

Exchange and over-the-counter trading of cryptocurrencies, ICOs and other methods of issuing and selling tokens have been prohibited in China for several years. Banks and other financial institutions are prohibited from conducting transactions, related to cryptocurrencies. Mining is also almost completely prohibited in mainland China., which caused the flight of miners to other jurisdictions back in the spring. These bans have been in effect for a long time and have been taken into account by the market..

In this way, new NBK sanctions can no longer cause any significant changes in the cryptocurrency market. This is a purely paper attack., fixing the existing status quo. Of course, the few cryptocurrency businesses still remaining in China will be forced to change jurisdiction following the rest of their “colleagues in misfortune”. for instance, Manufacturers of ASIC miners will have to think about this, software developers for cryptocurrency services and any other companies, still accepting payments in cryptocurrencies and exchanging them for Chinese Yuan.

It's also quite possible, that additional documents will be published soon or clarifications from NBK officials will be given, which will clarify the picture of the new “cryptocurrency reality” in China.