While a plethora of news over China’s cryptocurrency industry has generated a rather bleak public perception, local associations seem intent to circumvent current obstacles put in place by the government.
Amid China’s on-going crackdown on ICOs, and on crypto as a whole, Hong Kong takes steps to induce a safer and more legitimate trading environment. While it is fair to wonder if China’s actions will affect Hong Hong’s approach, the SFC takes appropriate steps to improve the outlook of cryptocurrencies in the region.
As intriguing clues continue to flood the market, industry leaders weigh in with their views on the crypto space, and the ways in which individuals and companies act to maintain their crypto related activities.
Self-Regulatory Organization to Oversee Industry
Working in collaboration with Chinese authorities, the National Internet Finance Association (NIFA) of China publicly announced its commitment to increase its supervision on ICOs. The announcement falls in line with the recently intensified Chinese cryptocurrency crackdown.
NIFA’s official statement included the following sentiment: “Special monitoring projects in 2017 included issuing warnings on virtual currencies, ICOs as well as ‘disguised’ ICOs. Moving forward, 2018 will be a critical year for the association to normalize and standardize its existing efforts put into these projects.”
China bans ICOs and cryptos but it can’t be enforced. Banks refuse ICO and crypto payments, but we have alternatives. Technology always overcomes legislation. This is truth. ICOs are our future and must be fought for, and crypto is our right. Stand on our side without fear.
— John McAfee (@officialmcafee)
According to an anonymous Finance Magnates source, there has yet to be a strong impact on the crypto market, despite regulators’ crackdown efforts. While some exchanges no longer accept Chinese clients, existing users can still access their accounts. Unless additional governments take a similar stance as China, the FM source says, the crypto market will continue to see growth. While regulation is desired and even encouraged, in order to weed out any unlawful activity, it is also important to find the balance that will not fully hinder the entire industry.
Spillover into Hong Kong?
In addition to NIFA’s voicing of its plans to tighten regulations over ICOs, Hong Kong’s regulators show signs of similar activity as well. Hong Kong’s Securities and Futures Commission (SFC) proclaim it sent warning letters to seven crypto exchanges, urging them to reassess some of the crypto assets being offered on their platforms.
The bottom line of the letters requests that the exchanges reclassify certain coins as securities tokens, and to consequently delist them from their exchange platforms. While Hong Kong remains relatively passive in its approach toward the industry’s regulatory framework, the timing of the SFC’s announcement induces questions over the potential influence of Chinese officials on the outlook of the crypto space in Hong Kong.
Chinese Crackdown Continues
Last week, the cryptocurrency market suffered a blow, dealt out by Chinese authorities, who officially access to crypto exchanges and websites from within the country.
China has been a leading adversary of the industry, shutting down ICOs, and placing confinements on a fast-growing financial market. In addition, the government has also outlawed the advertisement of leveraged FX trading, requiring Baidu to immediately any and all ads connected with the industry.
China’s negative stance on Bitcoin & Crypto has bed already priced in
What many failed to grasp – impact of the Testimony of CFTC and SEC Chairs!
Go get more Bitcoins untill too late!
— George Kikvadze ⚡ (@BitfuryGeorge)
The repercussions of the government’s actions are still being assessed, and have yet to truly be quantified, but the action has certainly led to a mass exodus attempt on behalf of Chinese investors from the crypto space.
Zotapay CEO Avner Ziv offers his views of recent events by mentioning China’s crackdown on cryptocurrencies falls in line with similar actions taken with respect to The Great Firewall of China. Local authorities and regulators show concerns with having a decentralized system, which falls out of the government’s controls.
Having their own managed crypto space is far more likely to be sustainable in China, a direction in which the country could be heading as the current crackdown intensifies. Moreover, Ziv likens the exchanges ban to other technological companies and products. “It was the same with Google, Facebook, and What’sApp media platforms which the Chinese prohibited their usage at the beginning and then came up with their own alternative platforms controlled by them with similar services.”
Photo taken in Shenzhen, China.
It says this McLaren P1 is for sale for ￥17.8 mil CNY (~$2.8 mil). BTC, ETH, and BCC (actually BCH) are accepted as payment.
This is one of the three luxury sports cars in the shop that accepts crypto-currency payment. Here goes the other two:— cnLedger (@cnLedger)
Are Chinese Actions Positive in the Long Run?
Finance Magnates reached out to Shanghai-based financial services firm RootAnt CEO and Founder Lincoln Yin. Yin specifies that some Chinese investors could bypass the government’s decision to block access to cryptocurrency websites, by using various tools to gain access to foreign websites.
Yin further elaborates: “As the market is too hot, I think the action from the government is not a totally bad thing, it is actually good for long-term. And this could protect some of those traders that don’t understand much about the market and set a not realistic expectation to the return. If this kind group of traders grows too large, it would be a social problem, which has been happened in China many times with other instruments before.”
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