China is intensifying its crackdown on all aspects of cryptocurrency activities, as confirmed by recent statements made by the governor of the country’s central bank. Pan Gongsheng, who assumed the role of head of the People’s Bank of China (PBOC) in July, announced that authorities will launch a “severe crackdown” targeting illegal cryptocurrency transactions, exchanges, fundraising, and mining operations.
These remarks were delivered by Pan during his first major policy speech as PBOC governor at a meeting of the National People’s Congress Standing Committee on Saturday. He emphasized the importance of curbing financial risks and strengthening oversight in areas related to digital assets.
China officially declared all cryptocurrency usage, including trading and mining, as illegal in September 2021. However, despite the blanket ban, crypto trading remains popular among Chinese investors who often utilize offshore exchanges for their activities.
According to The Wall Street Journal, the major exchange Binance processed approximately $90 billion worth of trades from Chinese users in May 2022 alone.
Meanwhile, Hong Kong, which has aspired to become a global cryptocurrency hub, has also introduced stricter regulations on digital asset investments, particularly targeting retail investors.
In a joint circular issued on Friday, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) revealed that certain “complex” crypto-related products will now only be available to professional investors who possess sufficient knowledge and net worth.
This intensified regulatory stance follows the recent exposure of significant fraud allegations against crypto exchange JPEX, resulting in around $180 million in losses for investors. Given the growing mainstream interest in crypto-linked investments in Hong Kong, regulators aim to mitigate risks, particularly for retail investors.
