Beijing Regulator Ruled out the Possibility of Licensing Crypto Exchanges

Marko Vidrih
Jan 13 · 2 min read

On January 11, the director of the Beijing financial regulator, Huo Xuewen, said that control over cryptocurrencies in the capital of China will be tightened, writes local media 8btc.

The Beijing Financial Bureau does not accept the issue of cryptocurrencies since cryptocurrencies cannot be used as legal tender in digital form. Huo emphasized that only the People’s Bank of China can issue legal cryptocurrencies.

According to the regulator, many crypto exchanges use the structure of a legal entity with variable equity participation to reduce risks. This structure assumes that the foreign legal education of the exchange is separate from the local one — the latter in this case is a subsidiary of the former in Chinese jurisdiction. Such a unit is not engaged in commercial activities in the main direction but is responsible for business and finance in the domestic market in accordance with the agreement.

Huo said that the regulator is aware of this phenomenon, and the issue, sale and exchange of cryptocurrencies in China are considered illegal activities. At the same time, companies selling cryptocurrencies to Chinese citizens through financial pyramids or attracting investors to cryptocurrencies through various channels will be held accountable by law.

He also stressed that no company or trading platform is allowed to sell cryptocurrencies to local investors.

“In addition to speculation, cryptocurrency has no real value. There is no need for a trading platform that has no real value but can only cause investors to be cheated and social instability,” he said.

Earlier, Beijing police stopped the activity of the BISS cryptocurrency exchange, arresting dozens of suspects. The exchange was registered in a foreign jurisdiction and had an illegal operating unit in China.

“China does not allow cross-border cryptocurrency transactions. No institution can sell overseas cryptocurrency to Chinese, and no institution can provide the exchange of cryptocurrency to CNY. For this, we will closely monitor and crackdown on it,” Huo commented.

Asked if China could deal with licensing crypto exchanges in the future, Huo said he don’t think so.

It became known earlier that the outflow of capital from China through cryptocurrencies in 2019 amounted to $11.4 billion.

Author: Marko Vidrih

Featured image credit: Pixabay

The Capital

The Capital (former Altcoin Magazine) is a social financial news aggregator powered by Bitcoin

Marko Vidrih

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Most writers waste tremendous words to say nothing. I’m not one of them.

The Capital

The Capital (former Altcoin Magazine) is a social financial news aggregator powered by Bitcoin

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