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China’s ‘Silicon Valley’ Identifies 39 Cryptocurrency Companies As Illegal

2 mins
22 November 2019, 21:17 GMT+0000
Updated by Kyle Baird
25 November 2019, 07:28 GMT+0000
Shenzhen is the blockchain hub of China, but its law enforcement will soon be cracking down on cryptocurrencies. The state has identified some 39 illegal cryptocurrency companies operating within the city.
China’s so-called ‘Silicon Valley’ may soon find itself amidst a serious cryptocurrency crackdown, reportedly against scams and Ponzi schemes. Shenzhen, the leading tech hub of China, is also the home of many cryptocurrency-related scams.  Authorities have reportedly identified 39 illegal companies that have been responsible for defrauding everyday consumers.

39 Cryptocurrency Companies Targeted as Frauds

According to reporter Dovey Wan (@DoveyWan), the authorities are specifically targetting companies engaging in ‘pump-and-dump’ and pyramid schemes. The exchanges involved in aiding these illegal activities will also be punished severely. Shenzhen’s authorities will reportedly focus on three key activities as part of their legal crackdown: cryptocurrency trading, foreign-licensed exchanges, and cryptocurrency-related investment funds. The 39 companies in China being targeted by this new measure have not yet been disclosed. However, we can expect the names of these ‘illegal’ firms to be released in the coming days, and maybe some information on the exchanges that aided them.

Shenzhen Is a Regulatory Testing Ground for China’s Government

Thursday, BeInCrypto reported on Shenzhen’s changing regulatory regime. Although news of the new legal framework was being leaked in the press in recent days, it seems that now we have some concrete numbers on how many companies will be affected by the move. Shenzhen will likely prove to be a pilot city for blockchain-related regulations, given that it is the tech hub of China. If successful, we could see these same stipulations apply to other major cities and, eventually, to the rest of the country. China However, the regulatory policy is nothing new in light of China’s established hostility to cryptocurrencies. Keeping up with its ‘blockchain, not cryptocurrencies’ party line, the state has been hostile to competitors to its Chinese renminbi.
Images are courtesy of Twitter, Shutterstock.
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