China Officially Bans All Cryptocurrency Transactions and Mining Operations
China declares all cryptocurrency-related transactions illegal and bans foreign exchanges from serving its citizens. Ten government agencies collaborate to enforce a sweeping crackdown on trading and mining.
China's central bank announces that all cryptocurrency-related transactions are illegal, citing national security and the safety of people's assets. Ten government agencies issue a joint statement vowing to maintain a high-pressure crackdown on crypto trading and explicitly ban foreign exchanges from providing services to users in the country. The People's Bank of China orders internet, financial, and payment companies to stop facilitating any cryptocurrency trading on their platforms.
The central bank states that cryptocurrencies like Bitcoin and Tether are not fiat currency and cannot circulate in the market, claiming that crypto usage disrupts economic and financial order. Authorities link digital currencies to money laundering, illegal fundraising, fraud, and pyramid schemes, warning that offenders face criminal liability. This declaration immediately triggers panic among traders, causing the price of Bitcoin to drop by 5.5 percent.
Alongside the transaction ban, China launches a nationwide cleanup of cryptocurrency mining operations, a move the National Development and Reform Commission calls imperative. While regulators have weighed a mining ban for several years, this marks the first time so many government agencies collaborate on such a massive scale. Despite this sweeping enforcement, some industry observers point out that China has a history of repeating crypto bans, leaving room for cautious optimism among certain market participants.