Banks Ordered to Flag Risky Trades
China’s foreign exchange regulator has introduced new laws requiring banks to flag risky transactions, including those involving cryptocurrencies.
The State Administration of Foreign Exchange (SAFE) issued a notice last week outlining that banks must monitor and report “risky foreign exchange trading practices”.
China forces banks to report risky cryptocurrency transactions
According to the latest news ReportThe regulations will make it more difficult for Chinese investors to trade Bitcoin and other digital assets. Banks must report foreign exchange activities, including underground banking, cross-border gambling and illegal financial transactions involving cryptocurrencies.
The report also noted that the rule would apply to all Chinese banks. Banks will now track transactions based on the identity of the individuals and institutions involved, the source of funds and the frequency of transactions.
This move reflects China’s continued Strict supervision Commercial crypto activities. Cryptocurrencies are seen as a threat to the country’s financial stability.
According to the South China Morning Post, Liu Zhengyao, a lawyer at Shanghai Zhiheng Law Firm, commented on WeChat’s new regulations.
The new rules will provide another legal basis for punishing cryptocurrency trading. It is foreseeable that mainland China’s regulatory attitude towards cryptocurrency will continue to tighten in the future. Liu said.
Liu also noted that the practice of using yuan to purchase cryptocurrencies and then converting them into foreign fiat currencies can now be considered “cross-border financial activities involving cryptocurrencies,” especially if the transaction amount exceeds legal limits.
China’s anti-encryption stance
Since 2017, China has restricted cryptocurrency trading and banned banks and payment systems from handling digital assets. In May 2021, the People’s Bank of China (PBOC) announced All transactions involving Bitcoin and other illegal cryptocurrencies.
Despite its anti-encryption stanceChina holds more than 190,000 BTC. This makes it the second largest government holding of Bitcoin after the United States. China obtained these assets by seizing assets related to illegal trade activities.
Interestingly, Justin Sun, founder of Tron blockchain, Urge China to adopt a more forward-looking approach Cryptocurrency policy will be formulated in July 2024.
“China should make further progress in this area. Competition between China and the United States on Bitcoin policy will benefit the entire industry.” Sun said.
Recently, a Chinese court rules Crypto-assets have “property attributes” and Chinese law does not completely ban them. However, these protections only apply to cryptocurrencies as commodities, not as currencies or business instruments.
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