China’s Internet Censorship Agency Publishes Draft Regulations For Blockchain Startups

Blockchain, News, Regulation | October 22, 2018 By:

The Cyberspace Administration of China (CAC), the country’s Internet censorship agency, has published new draft regulations for blockchain-related service providers. The draft regulations is open for public consultation until November 2.

The draft, titled “The Regulation for Managing Blockchain Information Services,” defines blockchain information service provider as “entities or nodes” that offer information services to the public using blockchain technology. It seeks to “standardize blockchain information service activities, promote the healthy and orderly development of blockchain information services, protect the legitimate rights and interests of citizens, legal persons and other organizations, and safeguard national security and public interests.”

If enacted, the regulation would require companies and entities operating in China to ask users to register their real names and national identification card numbers, censor content deemed to pose a threat to national security and store user data to allow inspection by authorities.

“Service providers must store the logs and content published by users of their blockchain services for six months and provide this information to law enforcement when required,” the document states.

South China Morning Post (SCMP) reported that the proposed rules come in the wake of a high-profile incident in April this year, in which a Chinese activist published an open letter about an alleged cover-up of sexual harassment at a prestigious university more than two decades ago on the ethereum blockchain. The activist reportedly attached the letter onto a publicly-visible transaction on ethereum after authorities removed the post from social media platforms, such as WeChat and Weibo.

Beijing-based lawyer Xu Kai said that one of the key issues that the proposed rules did not address is that blockchain is a technology in which data is not changeable or erasable, which runs contrary to Chinese laws governing user data. Xu further notes that the rules do not outline enforcement procedures to “protect the rights” of blockchain platforms.