China’s police said to monitor foreign cryptocurrency exchanges
China’s Public Information Network Security Supervision have expanded its Internet monitoring to include overseas digital currency exchanges, Coindesk has reported, citing a Chinese business news publication.
According to a recent report by local media outlet Yicai, the agency, which operates under China’s Ministry of Public Security, has been monitoring offshore cryptocurrency exchanges, as well as domestic exchanges running overseas operations. This is part of the Chinese government’s efforts to prevent potential money laundering, pyramid schemes and investment fraud from platforms accessible to domestic investors, the report says.
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China’s clampdown on its cryptocurrency sector began in early September, with the government imposing a ban on initial coin offerings (ICOs). A few days later, the authorities ordered local exchanges to stop their domestic fiat-to-cryptocurrency treading operation. In an attempt cope with the negative impact of the ban, some of the country’s leading virtual coin exchanges have launch over-the-counter trading platforms, as well as operations in overseas markets.
Earlier this week, Coindesk reported that these strategies have allowed exchanges, such as Huobi and OKCoin, to continue to grow their businesses. These two companies, which were two of the largest crypto exchanges in China prior to the ban, have already launched successful OTC trading platforms – Huobi Pro and OKEx – that now trade digital currencies only.
“The shift to over-the-counter trading is an unexpected pivot to us. We had never anticipated that to be one of our business strategies,” Huobi’s chief operating officer, Robin Zhu, told Coindesk. The company is also working on a plan for international expansion and has already opened offices in Hong Kong, Singapore, South Korea and the US.
“Whatever the policy may be, we will comply with the rules and are here to say. The [bitcoin] trend is irresistible,” Zhu said.
Reports in the Chinese media earlier this month said that the local authorities had been dissatisfied with the effectiveness of the bans and were planning to block all websites related to cryptocurrency trading and ICOs.