China’s Banks Blacklisted Local Bitcoin OTC Businesses

People’s Bank of China (PBoC), the country’s central bank, started to flag accounts traced back to large cryptocurrency traders in its most recent vigorous measures, the local news outlet WuBlockchain reported. The move is part of a more extended crackdown of money laundering in China. 

Earlier this year, the PBoC started its movement to get rid of illegal earnings and partnered with the country’s local banks to share account information and transactional data in order to prevent the propagation of unlawful funds, of which cryptocurrencies form a part in China.

Put against the wall with the brunt are China’s over-the-counter (OTC) crypto dealers or companies that lead trades outside the public market – such as crypto exchanges – and typically transact with upwards of millions of dollars.

A few crypto OTC accounts have allegedly been put on a ‘blacklist’ kept by the PBoC and are banned from using bank-issued cards for the next three years or even carry out online transactions in the next five years, the report notes. These restrictions apply to all blacklisted accounts and are not limited to cryptocurrency accounts.

Affected Businesses

After a bank has flagged and restricted transactions from a particular account, it reports it to a regional branch of PBoC. This process makes sure that information regarding blacklisted accounts is then issued to the other banks across China, therefore, preventing OTC dealers from opening new accounts in other places.

The move has to lead to numerous crypto OTC dealers closing down their business in fear of consequences, the report says. Still, industry experts say that the blacklisting does not apply only to simple cryptocurrency sales.

“Normal cryptocurrency transactions are not illegal, and only those involving black money and illicit assets will be frozen,” said crypto exchange and OTC desk Huobi, in the report.

The lack of integrated rules across all banks would mean an OTC business would be added to the blacklist regardless of its legitimacy. China has no definite laws on cryptocurrencies either, so this makes the asset a legal grey area, therefore, prone to the judgment of individual banks.


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Andreas Townsend Author

I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.

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