China Crackdown Continues with New Identity Demands

Investing, News, Regulation | March 20, 2017 By:

Continuing its regulatory crackdown, the People’s Bank of China (PBOC), China’s central bank, has circulated new guidelines that would require cryptocurrency exchanges to identify clients and adhere to mainstream banking regulations.

Bitcoin withdrawals have been frozen on leading Chinese exchange platforms since earlier this year, when regulators began paying attention. The platforms had targeted March 15 for again allowing withdrawals, but now have no set date in mind.

According to reports on the media outlets, the Bitcoin exchanges and trading platforms for any virtual Internet goods operating from the country will have to install systems to collect information on users and also report any suspicious trading activities to the authorities. The PBoC will be in charge of handling any violation.

First-time users will need on-site certification in order to deposit funds. Prospective users will then be required to present identification at the time of registration. For customers doing ¥50,000 (over US $7,200) in volume, a remote video certification will be required for identity authentication.

Zhou Xuedong, director of the National People’s Congress and the central bank’s department of business administration, recently said authorities need to explore “long-term regulatory mechanisms” and licensing requirements for all digital currency exchanges at the national level. Zhou also called for the creation of blacklists against exchanges that do not follow PBoC’s directives.