Chinese Central Bank Targets Crypto Airdrops And Giveaways In New Ban
According to the People's Bank of China (PBoC), the country is looking to issue a ban on the free crypto airdrops.
According to the People’s Bank of China (PBoC), the country is looking to issue a ban on the free crypto airdrops.
On November 2nd, the PBoC published a financial stability report explaining that despite the numerous bans the country has issued on cryptocurrencies, there are still ways to bypass the law.
No gifts allowed
According to the PBoC, even giving away cryptocurrency tokens for free could be regarded as illegal.
As airdrops in the country continue to grow in number, they have been recognized by the government as an attempt to illegally generate value by speculating on the previously issued crypto assets.
Additionally, the borderless nature of cryptocurrencies is also presenting a problem to the PBoC.
It is widely known that many crypto-related businesses have and are moving their projects out of China, but PBoC claims that they have been using special agencies to invest on behalf of investors from China, making the whole fundraising illegal in the eyes of the harsh Chinese regulators.
The Chinese central bank also declared its stance that the coordination with other agencies is of vital importance for monitoring the crypto industry in order to educate and protect investors, further calling for the highest level of vigilance.
A long history of bans
Anybody moderately familiar with cryptocurrencies knows that the Chinese government didn’t hold up when they’ve cracked down on all aspects of cryptocurrency business.
The country’s government even reported that their all-encompassing series of bans has been a huge success as it almost completely devastated the crypto-trading scene in the country.
By all-encompassing, we mean banning exchanges and Initial Coin Offerings (ICOs), storming a large-scale Bitcoin mining operations and confiscating their machines, banning crypto-related promotional events and forbidding any kind of crypto-related commercial activity.
In the end, even imposing travel bans on the executives of the leading trading platforms in the country.
Since giving away cryptocurrencies doesn’t fall under any of these bans, the Chinese government was, it seems, forced to issue yet another ban to correct what was missed before.
China is losing their smartest individuals
Needless to say, all that banning and scrutiny incentivized the most prominent players from the youngest industry to leave their homes and seek their fortune elsewhere. If you didn’t know, the biggest cryptocurrency exchange by volume in the world, Binance, originates from China.
Its CEO, Changpeng Zhao, and his closest associates decided that it was time to seek a more crypto-friendly environment in the Mediterranean island state of Malta earlier this year, as well as OKEx. For the same reasons, Huobi found a shelter in Singapore.
Bitmain, as one of the biggest producers of specialized mining hardware (ASIC miners), had moved its regional headquarters to Singapore and, despite the high cost of electricity, has active mining facilities in both Canada and the US, instead of China.
Furthermore, while it can’t be confirmed, it is widely believed that a majority of investors have just transferred their crypto assets to overseas exchanges and carried on with what they were doing before.
PBoC claims it is protecting and educating
PBoC claims that all these bans are set in place to “protect and educate” investors.
However, they have obviously forgotten that education is done by educational institutions, such as the University of Malta, which has launched a $300,000 blockchain scholarship program in September.
And protection? It is very difficult to protect your citizens from technological evolution. Regardless, through the use of VPN’s and decentralized exchanges, China has very little control over crypto activities unless it completely shuts down the internet.
After all, Bitcoin and cryptocurrencies are by design censorship resistant.