The Chinese city of Shenzhen, often called the country’s ‘Silicon Valley,’ has reportedly instated new regulatory controls targetting cryptocurrencies.
A new legal framework was instituted in the city of Shenzhen recently, a major city in China’s Guangdong region. Shenzhen is known for being a hub of tech start-ups and developments, alongside many blockchain-related industries.
Dovey Wan — who has received scrutiny lately for one some consider to be misleading reports — is reporting that the legal framework in Shenzhen will target illegal cryptocurrency trading and pump and dump schemes.
— Dovey 以德服人 Wan ? ? (@DoveyWan) November 21, 2019
However, defining what is illegal is still relatively vague. However, we do know that ICOs and IEOs are unequivocally illegal in China — especially those catered towards Chinese retail investors.
Wan also mentions that capital flight through cryptocurrencies is also illegal in China as per Shenzhen’s new legal framework.
The new dictate also targets Ponzi schemes that have plagued China in the past few years, despite tight regulatory controls.
You may recall stores about Shenzhen being a blockchain hub from BeInCrypto’s prior reporting on China.
In May, the Shenzhen Institute of Financial Science and Technology in China began recruiting computer engineers and scientists who specialize in blockchain technology. In 2018, the People’s Bank of China also launched its own blockchain platform to better record transactions on foreign exchanges — in July, it reportedly processed a whopping $4.4B in transactions.
Shenzhen will undoubtedly continue to be a hub for blockchain-related developments in China for the foreseeable future. However, that makes this new legal framework all the more prescient. Given the Chinese state’s newfound love of blockchain, it will likely be leveraging the city’s well-developed tech industry to this end. We can likely expect some state-led grants and funding for blockchain projects once the regulatory regime is tweaked and perfect.
Images courtesy of Shutterstock.
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