China Central bank bans the local OTC merchants and the companies that are blacklisted will lose access to online banking for more than five years as many of them are shutting down businesses ahead of the repercussions as we are reading more in the latest crypto news.
Bitcoin and other crypto OTC dealers in China will face widespread issues in the country as those that will transact in crypto could see their bank accounts suspended. The move is a part of the massive crackdown on money laundering in the country. The China Central Bank bans local BTC OTC merchants that are related to large crypto traders in the latest crackdown according to a news outlet WuBlockchain.
This move is a part of a broader crackdown on money laundering in China as the PBoC launched the drive to eradicate the illegal earnings and even partnered with the local banks to share account information and transactional details to prevent moving unlawful funds of which cryptocurrencies form a part in China. Facing the Chinese crypto dealers, or companies that conduct trades outside of the public market, they usually transact with upwards of millions of dollars. Some OTC accounts have been put on a blacklist maintained by the PBoC and are forbidden to use the bank-issued cards for the next three years or conduct online transactions in the next few years. The rules apply to all blacklisted accounts and are not limited to crypto accounts.
The move led to a lot of crypto OTC dealers shutting down their business in fear of repercussions. Some industry observers say that the blacklisting does not apply to simple cryptocurrency sales as the crypto exchange Huobi said:
“Normal cryptocurrency transactions are not illegal, and only those involving black money and illicit assets will be frozen.”
The lack of unified rules across all banks will mean that an OTC business will have to find itself in the blacklist regardless of the legitimacy as the report noted. China has no laws on crypto either making the asset class legal gray zone and therefore susceptible to the judgment of banks. for China, the crackdown on crypto is ironic because of its development In state-backed crypto assets. the country is pushing to launch the digital yuan while on the other hand, it is blacklisting crypto companies.
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