WeChat, the Tencent developed social media giant, shutdown cryptocurrency and blockchain accounts. The accounts were banned as a response to the recent legislation passed in China that regulates promotion of initial coin offerings and cryptocurrency trading speculation.
The leading messaging and payment processing application are one of the world’s top social media networks with estimated active users of about a billion on a monthly basis. The application offers a wide range of applications on the platform. According to the AMBCrypto, it is recorded by Forbes as one of the most powerful applications in the world.
The banning started, on August 21, 2018, with more or less eight bitcoin and crypto linked accounts including the Huobi News, Coindaily, and Jinse Caijing. Bitcoin Magazine stated that Tencent confirmed that the closure of the accounts is in agreement with the regulatory policy based on the ordinance enacted on August 7, 2018, dubbed as Temporary Regulations on the Development and Management of Public Information Services for Instant Messaging
China is strict when it comes to the policies on cryptocurrency and account closures in the country are common. There were cryptocurrency trading companies banned from operating before the new ordinance was enacted driving their cryptocurrency operation underground or away from the reach of the Chinese government.
The new ordinance ID composed of 10 articles and one states that the users availing the services of a message sending app which is solely used as an information provider to the public needs to follow the government’s stated rules and regulations. The service provider of the messaging service will have the complete authority to impose necessary actions against the users if there was noncompliance of the rules and regulations. The users will receive warnings, restrictions, suspension of service, or banning available services for their violations.
The new regulations will heighten their monitoring of cryptocurrency accounts and their management of foreign currency flows in ICO’s. The new ordinance aims to end all cryptocurrency trading in the country entirely which still has an unclear impact on the global cryptocurrency markets.
According to the Forbes, The ordinance statement that China questions the sustainability of ICO’s and cryptocurrency trading and it contradicts experts opinion that ICO’s and cryptocurrency trading will prosper in China in the near future after all the rules have been set. The magazine cited the statement of Bobby Lee, CEO, and co-founder of BTCC, who stated that he believed that China would permit the cryptocurrency trade in the future.
The last few days have seen a renewed crackdown on cryptocurrencies and ICOs in China. A representative for the country’s People’s Bank has now stated that even more regulations should come in the near future.
Sheng Songcheng told Caixin that crypto trading and ICOs will likely be subject to even tighter control soon: “authorities will step up their oversight of those who use virtual currencies to conduct illegal activities in accordance with existing laws.”
As with most national crypto regulations, the protection of investors and businesses and the prevention of “bad money” driving out “good” is what is motivating these rulings, with fraudulent ICOs apparently one of the major concerns for the People’s Bank.
“There is a greater potential risk of laissez-faire development without supervision”, Sheng said. “A large number of projects without promising futures are even deceiving themselves…greater risk may emerge if we don’t put a lid on it. A large number of crypto scams would entail a great economic loss”.