People’s Bank of China to ‘clean up’ crypto trading in Shenzhen

The Shenzhen branch of the PBoC clamps down on 11 local financial companies over their crypto trading activities

The Shenzhen subsidiary of the People’s Bank of China said it intends to “promptly clean up and rectify” 11 companies for providing illicit crypto trading activities.

The central bank is determined to keep the pressure on the crypto trading industry after recently completing what it described as ‘the rectification’ of a “well-known domestic financial website”.

Chinese authorities started a crackdown on crypto mining in May, under the directive of the State Council “by giving foreign exchange deposits and dealing with eight reports of online forex and cross-border stock trading services”.

Suspected illegal practice

A report stated that, by the end of July, the Shenzhen Central sub-branch of the People’s Bank of China had formulated a list of suspicious activities that were suspected to be illegal.

“As of August 8, a total of 89,381 companies had been visited, and 20,664 companies had obtained credits of 52.379 billion yuan,” the report said.

“Special financial support activity for the development of individual industrial and commercial households with the aid of ‘loan for small businesses and serve the people’s livelihood’ was launched.”

It added that 3.249 billion yuan of credit had been granted to 1,888 individual industrial and commercial households.

“Rectification” is the term often used in China to mean the government is trying to make companies act in regular terms and has been widely used in the past year’s crackdown on tech companies, notably in the case of the Ant Group.

The dual listing of Alibaba’s Ant Group on the Hong Kong and Shanghai Stock Exchanges was scheduled to take place via STAR in November last year, but the Chinese government abruptly halted Ant’s $37 billion stock debut two days before the initial public offering (IPO) due to regulatory scrutiny of the online wealth management and banking platform.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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