China is intensifying its regulation of cryptocurrency transactions, implementing new measures to curb illegal financial activities.
New SAFE Regulation
The State Administration of Foreign Exchange (SAFE) in China has introduced stringent measures to monitor transactions related to underground banking, cross-border gambling, and illicit cryptocurrency activities. Banks are required to verify the identities of participants, trace the sources of funds, and monitor trading frequencies, making it more challenging for Chinese investors to engage in cryptocurrency trading.
Historical Context and Legal Aspect
Historically, China has maintained a strict anti-crypto stance, viewing digital currencies as a threat to financial stability. Legal expert Liu Zhengyao noted that the new regulations provide a legal basis for penalizing crypto trading, particularly when transactions exceed legal limits. Despite the crackdown, China remains a significant player in the Bitcoin market, holding over 190,000 BTC acquired through seizures linked to illegal activities.
Reaction and Future of Crypto Market in China
Tron founder Justin Sun has called for a more progressive regulatory approach to strengthen China's position in the global crypto industry. However, the prevailing trend indicates tighter regulation, with SAFE's directive reinforcing the government's commitment to eliminating financial risks, leaving Chinese investors in a stringent trading environment.
China continues to tighten its grip on the cryptocurrency sector, implementing new regulations and increasing restrictions, further limiting the opportunities for local investors.
