Home / Blockchain / China tightens its grip on Blockchain-based services

China tightens its grip on Blockchain-based services

Users of blockchain-based information services will have to register their real names and identity numbers in the last crackdown – even if Hong Kong moves to attract virtual goods merchants

China has strengthened regulatory pressure on blockchain-based information services, in an attempt to ensure that authorities can track any information published online in the country to the person who published it.

The move follows other regulations that prohibit trade in virtual currencies on the continent, although Hong Kong strives to turn into a global capital for investments in cryptocurrencies.

The new regulations, published by the Cyberspace Administration of China (CAC) on Thursday, were distributed for the first time in draft form in October.

They are designed to safeguard national security and public social interests, the CAC said.

registration

Require service providers to register the real names and identification number of users, to modify content deemed dangerous for national security and to store user data for inspection by the authorities.

The regulation, the first one specifically targeting the blockchain technology that underpins Bitcoin and other virtual currencies, will enter into force on February 15th, with service providers granting 20 days to provide user registration data to the government.

Currently there are no widely used blockchain information services in China. Issues, a technology-based Reddit equivalent in Chinese, is currently only by invitation as it is being tested.

In April of last year, an anonymous activist in China published an open letter that evaded government censorship by attaching information to the Ethereum blockchain and the resulting controversy would probably inspire the new regulations, the South China Morning Post reported last year.

The open letter, which concerned alleged sexual misconduct in one of the country's best universities over two decades ago, was connected to the blockchain in a transaction that the unknown individual had done to herself. The blockchain is visible to the public and is designed to be impossible to modify, since it functions as a distributed register system.

The American startup Steemit is an example of a popular information service similar to Reddit that uses virtual currency tokens based on blockchain to reward users whose posts are submitted to upvoting by readers.

Registers distributed increasing

The new law is part of China's complex response to the increase in distributed accounting systems and virtual currencies like Bitcoin.

On the continent, the authorities set up a total ban on initial coin offerings and cryptocurrency trading in September 2017, following a series of market manipulation and fraud cases.

But at the same time, the Hong Kong Financial Regulatory Authority, the Securities and Futures Commission (SFC), introduced a series of rules governing cryptocurrencies last October in an effort to improve investor protection and make the city a commercial center for virtual resources.

The new rules, which target both the funds investing in digital currencies and the platforms that trade them, prohibit consumers from participating in such funds or platforms, but allow professional investors.

Analysts said that at the time the regulations could attract Chinese mainland Chinese investors to encrypt activities in Hong Kong.

"We hope to encourage the responsible use of new technologies and also to offer investors more choices and better results," SFC CEO Ashley Alder said at the time during FinTech Hong Kong week last year.

Source link