A council member at the Bank of China Law Research Association, Sa Xiao, said that holding Bitcoin in China is still legal. He added that trading Bitcoin amongst individuals is also legal.
On May 22, the Beijing news reported a case where over a hundred people scammed more than 7,000 BTC. The two Chinese residents have been accused of running an illicit Bitcoin loan scheme and collecting Bitcoin and promising interest on the deposits.
The allegedly defrauded investors became suspicious when the interest paid in Chinese yen stopped on time in April.
The two individuals gained the investor’s trust by operating chat groups on a popular Chinese messaging app WeChat where they posted OTC offers for various cryptocurrencies. The two have been arrested while it’s unclear whether the two-ran an unauthorized loan scheme or they just defrauded the investors off their assets.
Xiao stated that:
If one runs BTC trading as a business and has caused significant customer losses w/ serious consequences, the possibility of punishment according to criminal law (other illegal business practices that seriously disrupt market order) cannot be ruled out.
Although, holding Bitcoin in China is still legal, China’s stand remains harsh on cryptocurrency regulation efforts by other leading nations around the globe. The Chinese government is also considering banning cryptocurrency mining activities. The National Development and Reforms Commission (NDRC) recommends the government should shut down crypto mining facilities.
It’s unclear if China will reverse its position on cryptocurrencies soon. Unfortunately, with its harsh stand China is no longer the leading cryptocurrency trading market in the word. This is a position China occupied before the cryptocurrency and ICO trading ban of 2017.
Do you think Bitcoin in China will soon get a green light to include trading?
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