Chinese Regulators Shut Down A Domestic Software Firm Over Alleged Involvement in Illegal Crypto Trading

Two financial regulatory authorities in China have intensified measures to crackdown activities associated with cryptocurrency-related businesses.

The Beijing Financial Supervision and Administration Bureau and the Business Administration Department of People’s Bank of China (PBoC) have ordered the shutdown of a Beijing software manufacturing company over its suspected involvement in crypto trading.

The Business Administration Department of the PBoC is a division of China’s central bank.

The two regulators issued a joint statement on Tuesday, July 6, warning against risks of involvement in cryptocurrency trading activities. They consequently requested a shutdown of a local software company, ‘Beijing Qudao Cultural development Limited’ over its alleged involvement in crypto trading.  

It is not clear whether Beijing Qudao Cultural Development Co Ltd involved itself in activities associated with crypto trading. But local reporter, Colin Wu, stated that the firm had been majorly operating its business in the entertainment industry and had its cryptocurrency “Mao Li Coin"(Cat Coin).

Following the announcement, the business operations of the software firm have been closed down and its website deactivated. The two regulatory authorities stated that the firm was suspected of offering software services for digital currency transactions. Regulators emphasised that businesses operating within jurisdictions are prohibited from providing marketing, ad display, business premises, or paid online traffic services for cryptocurrency-related business activities.

Tightening Crypto Regulations

The announcement comes a few weeks after China’s central bank ordered local banks to terminate the payment channels of clients involved in cryptocurrency. 

Last month, the PBoC ordered domestic banks and payment platforms not to offer services associated with digital currencies, therefore further escalating the nation’s crackdown on cryptocurrencies.

The regulator stated that speculative trading in crypto assets endangers peoples’ wealth, is a threat to the financial and economic order, and spawns the risks of criminal activities like money laundering and illegal assets transfers.

China has been scaling up its regulations of crypto assets.

Last month, authorities intensified the crackdown on crypto mining by ordering miners to stop their operations.

Following the nationwide crackdown by Chinese authorities, Bitcoin’s value plunged below $30,000 for the first time in six months.