Chinese Tech Capital Shenzhen Issues Warning Against Crypto Activities

The Chinese technology capital of Shenzhen issued a warning against illegal activities concerning cryptocurrencies.

Local finance news outlet Eastmoney reported on Nov. 21 also that Shenzhen’s Leading Group for Remediation of Internet Finance Risks will investigate and collect evidence on illegal activities involving cryptocurrencies

The crypto ban improved safety, says official body

The Leading Group warning states that, since China banned local exchanges and initial coin offerings (ICOs) from operating in 2017, the illegal activities associated with cryptocurrencies and financial risks were greatly reduced.

Still, the regulator notes that the recent endorsement of blockchain technology by the central government reinvigorated cryptocurrency speculation. Alongside increased speculation, the number of cryptocurrency-related illegal activities in the country have also purportedly ramped up.

The warning cites the issuance of crypto assets, ICOs, fictional uses of technology, fundraising in fiat or crypto and cryptocurrency exchanges as examples of illicit activity in the industry. 

After accumulating evidence, the regulator plans to undertake enforcement actions against such activities according to the “Announcement on Preventing the Risk of Subsidy Issuance of Financing.”

China is currently dealing with the increased public interest in cryptocurrencies and blockchain following President Xi Jinping’s official endorsement of blockchain tech development.

As Cointelegraph recently reported, Chinese state media said that there are around 32,000 companies in China that claim to use blockchain technology, but most of them are capitalizing on the hype to promote their company. In reality, only 10% of firms that claim to use blockchain tech actually deploy it, CCTV states.