People’s Bank of China in Shenzhen ‘cleans up’ illegal crypto firms

The Shenzhen branch of the People’s Bank of China launched a special “rectification” program against illegal crypto-related activities, beginning with a crackdown on 11 emerging companies.

The Shenzhen branch of the People’s Bank of China is taking a hardline approach to cryptocurrency-related activities deemed illegal. According to a report from state-run Shanghai Securities News yesterday, the branch has recently “cleaned up and rectified” 11 new companies suspected of engaging in illicit crypto trading.

The report did not disclose the companies’ names nor the details of how they were sanctioned. The action against crypto firms was carried out alongside a slew of wider-ranging measures against illicit cross-border trading of foreign currencies and stocks, with one target reportedly “a well-known domestic financial website that is suspected of publicizing illegal foreign exchange deposit transactions.”

In its summary of the branch’s agenda, Shanghai Securities News also noted that, parallel to its actions against firms in violation of the law, PBoC Shenzhen plans to:

“Carry out a pilot project of ‘precision education’ for financial consumers, use technology to enable accurate portraits of customers, and establish personalized risk prevention and education programs.”

Shenzhen authorities have consistently taken a stringent approach to the cryptocurrency sector, in line with Beijing’s increasingly toughened stance over the years. Although owning crypto has never been banned outright, the Chinese state has gradually ratcheted up restrictions on the industry since 2017. Over the past year, measures targeting crypto mining and trading have intensified, the former in part due to Beijing’s decarbonization commitments.

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While decentralized cryptocurrencies are likely to remain subject to municipal and regional crackdowns for the foreseeable future, since 2020, Shenzhen’s government has been cooperating with the PBoC on promotional rollouts of China’s central bank digital currency and, as of last month, the city’s residents can already use the digital yuan on buses and subways and use it to top up their travel cards.