China Increasing KYC Regulations For Blockchain Service Providers

Raising The Stakes

China has not historically been the biggest proponent of cryptocurrency, or the blockchains which they are built on top of. In Sep 2017, China launched a ban on Initial Coin Offerings (ICOs), claiming funds raised by these methods are unauthorized and illegal. Afterward, authorities have even started to ban WeChat media accounts which are associated with blockchain and cryptocurrency news. The nation is continuing to press forward in its campaign to quell the growing adoption of blockchain technology and use of digital currency because of the privacy and freedoms that the innovations afford to users.

Tug Of War

The newest regulations seem to come as a defensive play in response to a letter which was posted by social activists, authored by a now-deceased former Peking University student, inscribed within a memo on a transaction made on the Ethereum blockchain. To access the letter, the input data must be changed to the UTF-8 format. The letter was written by Gao Yan and details the attempts by some members of the faculty at Peking University to cover up her’s and other students’ accusations of rape and sexual misconduct against a former professor. China is becoming more aware of these new tactics and tools being used by advocates of free speech, and is becoming more aware of just how hard it can be to fight back against a decentralized system. It has yet to be seen if the Chinese government will burn themselves out trying to fight a war against the blockchain on every front, or learn to adopt a set of legislation and rules that work for both the country and the people. What do you think of China’s new regulations in response to citizens using the blockchain to circumvent its censorship laws? Let us know your thoughts in the comments below!