China stops anonymity for blockchain firms

Yesterday, the Cyberspace Administration of China (CAC) introduced new regulations for blockchain firms operating in the country and these will come into force on 15th February. The regulations are aimed at promoting healthy development in the industry.

According to the CAC document, firms that must follow the rules are those “that provide information and technical support to the public using blockchain technologies,” and who have websites or mobile apps. When the regulations come into force, these businesses must register their names, domains and server addresses with the CAC within 20 days.

The CAC’s guidelines also demand that blockchain startups allow authorities to have access to stored data. Furthermore, they say that firms must have user registration procedures that require ID card details or the person’s mobile number. And, as Cointelegraph reports, “they will be obliged to oversee content and censor information that is prohibited under current Chinese law.” Businesses that fail to comply with these regulations face substantial fines of 20,000 to 20,000 yuan ($2,900 — $4,400). And repeat offenders may face criminal charges.

China first produced draft regulations that would eliminate blockchain anonymity back in October. Earlier in the year, The South China Morning Post wrote about an anonymous open letter that alleged sexual harassment at a top Chinese university that was published on the Ethereum blockchain in April. Now the newspaper believes that this story may have encouraged the government to move forward with the regulations.

China is also piloting blockchain regulations in Beijing, Shanghai and Guangzhou regions, as these are where the majority of blockchain-based startups are located. The country’s ban on domestic crypto trading is still in place: it was imposed in 2017, and the government added crypto exchanges and ICOs to this ban in February 2018.