China declares all cryptocurrency transactions illegal

China declares all cryptocurrency transactions illegal

China’s central bank has announced that all transactions of cryptocurrencies are illegal, effectively banning digital tokens such as Bitcoin. ‘Virtual currency-related business activities are illegal financial activities’, the People’s Bank of China said, warning it ‘seriously endangers the safety of people’s assets’. The price of Bitcoin fell by more than US$2,000 (£1,460) in the wake of the Chinese announcement. It is the latest in China’s national crackdown on what it sees as a volatile, speculative investment at best – and a way to launder money at worst.

Sam Curry, Chief Security Officer, Cybereason, commented: “We shouldn’t read too much into the crypto ban in terms of its impact on cyber. The cyber and foreign policies of China or Russia include a wide assortment of tools. China’s or Russia’s rules for how internal markets and external trade may or may not use cryptocurrency have little or nothing to do with how they conduct themselves in cyber, foreign policy or even government practices.

“While I don’t think the ban is part of a bigger Chinese plan to suppress global crypto exchanges, it’s not unusual for powerful states to reach beyond their borders to have an effect. However, the rest of the world is using crypto just fine. China may make it a black market or grey market item in its sphere of influence, but it will continue and adapt and evolve just fine. Can Bitcoin and its peers fall? Sure. But this alone won’t do it or even come close.”

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