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China’s Baidu Joins Tech Giants Tencent, Alibaba in Imposing Fresh Anti-Crypto Measures

Chinese tech giant Baidu has joined Tencent and Alibaba in imposing new anti-crypto measures in line with Beijing’s toughened stance, South China Morning Post (SCMP) reports Monday, August 27.

China’s ‘Google,’ Baidu, has closed at least two popular crypto-related chat forums, according to SCMP, with a notice reportedly informing users that the move comes “in accordance with relevant laws, regulations and policies.”

Meanwhile, Tencent –– the operator of the 1-billion-user social media platform WeChat, has reportedly issued a statement announcing its own ban on crypto trading. The platform has said it will monitor daily transactions in real time and block any suspicious transactions accordingly.

Chinese e-commerce giant Alibaba –– whose subsidiary Ant Financial runs the overwhelmingly popular internet payment app Alipay –– has for its part said it will restrict or permanently ban any accounts it finds to be engaged in crypto trading.

All three announcements follow closely upon the heels of last week’s onslaught of toughened anti-crypto measures in China. These included a ban on all commercial venues from hosting any crypto-related events in Beijing’s Chaoyang district, alongside measures targeting communication channels or “loopholes” through which Chinese investors can gain exposure to Initial Coin Offerings (ICO) and crypto trading.

As reported August 21, WeChat permanently blocked a number of high-profile crypto and blockchain related accounts –– including CoinDaily, Deepchain, and Huobi News –– that were accused of publishing crypto “hype” in violation of regulations introduced earlier this month.

On August 24, Alipay announced that it would block those accounts that use its network to transact in Bitcoin (BTC) over-the-counter (OTC) trade, and would further establish an inspection system for “key websites and accounts.” Ant Financial has also reportedly said it plans to conduct a “risk prevention” program intended to educate users about the dangers of false crypto-related “propaganda.”

On August 25, the People’s Bank of China (PBoC) issued its own fresh warning declaring that it would be ratcheting up stringent measures against “illegal” ICOs.

According to CT Japan, new measures are also reportedly underway to toughen the “clean-up” of third-party crypto payment channels, including those used by OTC platforms.

This January, a fresh crackdown from Beijing had notably already seen fringe trading platforms including as peer-to-peer (P2P) and OTC resources banned, adding to a blanket embargo on crypto-to-fiat trading and ICOs in place since September 2017.

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Search Giant Baidu to Censor Crypto Discussions on Its Online Forum

Chinese search giant Baidu is joining Alibaba and Tencent in a move aimed to distance itself from cryptocurrency-related activities.

China Times, a Beijing-based business media, reported on Sunday that Baidu is seeking to censor and ban forum topics that discuss crypto-related activities on Baidu Tieba, the firm’s Reddit-alike online community business.

“Currently, the company has toughened its scrutiny over digital currency and will not allow sub-forums under such theme, based on relevant rules and regulations,” the report said, citing an anonymous source close to the firm.

A representative for Baidu Tieba told CoinDesk that “the company will operate and manage its forum business based on existing Chinese laws and regulations” but did not give specific comment on crypto-related discussions.

At the moment, at least the “digital currency” and “virtual currency” sub-forums appear to be unavailable as searching for these keywords lead to a statement saying “This forum is temporarily closed due to relevant laws, regulations, and policies.”

Commenting on such closure, the Baidu Tieba representative hinted it was because these sub-forums were suspected of distributing information about initial coin offerings (ICOs) and cryptocurrency speculation.

“The same with why WeChat did it,” the representative added, referring to the report last week that Tencent shut down the presence of several crypto media on its WeChat messaging platform due to suspected ICOs and crypto trading information.

Launched in 2003, Baidu Tieba is the largest online forum community for Chinese internet users. The company claimed its forum business now has around 300 million monthly active users.

That said, other sub-forums with relevant themes still exist and remain active on Baidu Tieba as of press time, such as “bitcoin,” “ethereum,” and “bitcoin mining,” etc.

Baidu’s move came just after Friday’s report that Alibaba and Tencent both said they will continue monitoring and suspending accounts who use mobile payments applications to conduct over-the-counter crypto trading.

On Friday, five high-level regulatory agencies in China jointly issued a warning against overseas cryptocurrency projects that use online communication channels to solicit investment from Chinese investors.

Baidu image via Shutterstock

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Chinese Crypto Bans on WeChat Accounts, Events, and Exchanges: What Happened and Why

This week, the government of China has cracked down on crypto-related WeChat accounts, blockchain events and digital asset exchanges, solidifying its negative stance on cryptocurrency trading and the Initial Coin Offering (ICO) market.

WeChat ban and PBoC’s warning against ICOs

On Aug. 22, Cointelegraph reported that WeChat, China’s biggest messaging app that has over 1 billion active monthly users, banned the accounts of cryptocurrency investors, users and businesses.

At the time, Lanjinger, a local financial media outlet, reported that the accounts of Deepchain, Huobi News, Node Capital-backed Jinse and CoinDaily were suspended or taken down permanently, as they violated its policy entitled “Interim Provisions on the Development of Public Information Services for Instant Messaging Tools” by promoting ICOs and cryptocurrency trading.

While CoinDaily confirmed that its WeChat channel with more than 100,000 subscribers was suspended by WeChat, Leonhard Weese, the president of the Bitcoin Association of Hong Kong, said to Cointelegraph that many accounts — destined to have been temporarily or permanently suspended — were actually taken down due to other sensitive subjects outside of crypto:

“They got blocked for talking about the vaccination scandal, not because of crypto. We find this counterintuitive, but reporting on scandals like that is far more sensitive than talking about crypto or doing crypto. I expect them to have their accounts reinstated in a week or a month.”

Expert argues WeChat ban is unrelated to crypto

In late July, the Chinese medical industry was involved in a major scandal after the country’s main drug industry watchdog released its findings that accused two pharmaceutical firms of developing inferior vaccines and deceiving local regulators.

Specifically, Changsheng Biotechnology was said to have released falsified data on the sale of more than a quarter million ineffective diphtheria, whooping cough and tetanus vaccinations, as Fortune reported.

Weese argued that, given the magnitude of the scandal in China and the global medicine sector, it is more likely that apart from the case of large-scale cryptocurrency accounts like CoinDaily, Deepchain, and Huobi News, most of the accounts that were banned by WeChat were involved in spreading misinformation about the scandal.

But, as one WeChat official confirmed to Lanjinger, the Chinese government vowed to take a stricter approach in cracking down on ICOs and token sales, and Chinese social media platforms will continue to shut down the accounts of individuals and businesses that are utilized to promote and advertise ICOs in the Chinese market, which were banned by the government in late 2017.

“[Accounts were permanently shut down for being] suspected of publishing information related to ICOs [initial coin offerings] and speculations on cryptocurrency trading,” the official said.

In a statement obtained by South China Morning Post (SCMP), the Huobi team denied that the ban of its account was related to the government’s restriction of cryptocurrency, but rather by the “broad action targeting industrial media” by WeChat.

Facebook blockchain initiative to affect China relationship?

In July 2018, Facebook, which was banned in China in 2008obtained a license to operate an office in China. The social media conglomerate has opened a $30 million subsidiary called Facebook Technology in Hangzhou to finance emerging startups and technology-related initiatives.

“We are interested in setting up an innovation hub in Zhejiang to support Chinese developers, innovators and start-ups,” Facebook told Verge in a statement.

Given the rumors around Facebook wanting to introduce its own cryptocurrency to the global market, it remains unclear whether Facebook’s supposed idea of integrating cryptocurrencies or launching its own blockchain platform could impact its current relationship with the Chinese government.

Chinese social media platforms like Baidu and WeChat have not seen any rumors in both domestic and international cryptocurrency communities regarding cryptocurrency and blockchain-related initiatives, possibly to avoid any conflict with local financial regulators.

PBoC issues warning against ICOs

On Aug. 25, the People’s Bank of China (PBoC), the central bank of the country, issued a warning against ICOs, firmly declaring that raising funds through token sales is illegal in the country. The PBoC and local financial authorities added in an official announcement that it was difficult to track and monitor transactions made through ICOs, even if the token sales are done domestically.

“The funds for these illegal activities are mostly overseas, and supervision and tracking are very difficult.”  

The PBoC further emphasized that, while the country has encouraged the development and commercialization of blockchain technology, ICOs cannot be considered to be legitimate operations or developments on the blockchain. The document reads:

“Such activities are not really based on blockchain technology, but rather the practice of speculative blockchain concepts for illegal fundraising, pyramid schemes and fraud. The main features are as follows:

  1. Risk of illegal activities, unregulated overseas markets and inability to track or monitor transactions made in ICOs.
  2. Deceptive, opaque and concealed fundraising methods, relying on celebrities and influencers to manufacture hype around investments to tempt investors.
  3. Illegal operations like profit-generating pyramid schemes and creating Ponzi schemes by describing them as ‘financial innovations.’”

Sheng Songcheng, an adviser to the People’s Bank of China, also confirmed to state-owned publication ce.cn that the government has decided to strengthen its ban on ICOs, banning public accounts, channels and communication platforms utilized to spread information about token sales.

Rise of OTC trading, Alipay takes notice

In December of last year, during the peak of the cryptocurrency market, when the combined valuation of all of the digital assets in the market totaled at $900 billion, China’s National Committee of Experts on Internet Financial Security — a government-backed research group — reported that the volume of the over-the-counter (OTC) Bitcoin market was rapidly increasing.

“Over-the-counter trading is booming. This warrants further attention,” the researchers said.

At the time, speaking to South China Morning Post, biggest mainstream publication in Hong Kong, Weese said that Telegram has been the go-to platform for large OTC trades due to the connections between local financial authorities and the operators of WeChat, but that a small portion of investors were still using the Chinese messaging platform. Weese explained:

“Telegram is very popular for large, over-the-counter trades. While WeChat is used by the less paranoid.”

Operators of various cryptocurrency exchanges and OTC platforms — including Tidebit — confirmed the rise in activity in the Bitcoin OTC market, stating that investors who could no longer trade within the Chinese market have started to explore peer-to-peer alternatives to invest in the asset class.

This week, Alipay — the most widely utilized fintech platform in China, with a 90 percent market share and a $150 billion market valuation — formally banned OTC trading on the Alipay network, preventing users of the Alipay mobile app to initiate transactions for Bitcoin or digital asset purchases.

Red Li, a cryptocurrency researcher and the founder of Chinese cryptocurrency community 8BTC, revealed that Alipay has begun the process of shutting down accounts involved in OTC Bitcoin trading, most likely due to the government’s request for banks and financial networks to shut down all possible payment channels that could be used to send funds to cryptocurrency trading platforms.

A rough translation of the statement released by Alipay disclosed the intention of the company to permanently ban any account that is reasonably suspected of funding Bitcoin exchanges to invest in the cryptocurrency space.

With the prohibition of OTC cryptocurrency trading by Alipay, the only channel that is left for local investors to allocate funds into the cryptocurrency market is the Hong Kong cryptocurrency exchange market.

Given that investors in China still send millions of dollars to Hong Kong shell companies’ bank accounts to purchase multi-million dollar properties on the Hong Kong real estate market, the possibility of investing through Hong Kong digital asset trading platforms with local bank accounts still exists.

But, due to the country’s strict capital controls and the government’s newly implemented initiative to track down savings and brokerage accounts utilized to evade taxes, it could become even more difficult to send money out of China to overseas markets.

Ban of crypto events

This week, Binance — the world’s largest cryptocurrency exchange by daily trading volume — had to cancel a cryptocurrency-related event in Beijing on August 23, as the government announced a ban on commercial blockchain conferences and meetups.

The local government of the Chaoyang District in Beijing revealed that it has informed hotels and other large-scale venues in the country that they are not allowed to host events that are related to cryptocurrency and blockchain, as part of its larger initiative to completely crackdown on ICOs and distributed fundraising.

In an interview with The Wall Street Journal, a Binance spokeswoman said that she was not aware of the closure of the event because the exchange hosts many events across the world.

“We have so many meetups around the world, and [they] may be canceled due to any reason.”

The People’s Daily, the publication operated by the Communist Party, reported that so-called venture capital-backed media outlets in China have made a significant fortune by creating hype around ICOs, but it is unsure whether the publications will be able to continue promoting ICOs in the long term. The publication could lead investors to believe that local authorities may target independent media outlets that promote ICOs in the months to come.

“These ‘media’ outlets have made huge fortunes in the speculative waves of cryptocurrencies, but due to their nature, it’s doubtful how long their barbaric growth can keep on going.”

Conclusively, in the past two months, the government of China has allocated the majority of its resources to strengthening its ban on cryptocurrency trading and the ICO market.

Given the censorship practiced by WeChat, Alipay and other platforms, along with Beijing’s ban on crypto events, it is likely that the country will see a decline in the adoption of blockchain technology and cryptocurrency development, which is ironic, as China has spent more than $3 billion in funding blockchain projects this year.

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Blockchain Startup Closes Multi-Million Dollar Funding Round Led by SoftBank, Baidu

Blockchain marketing platform Atlas Protocol (ATP) has concluded a seed investment round of several million dollars led by SoftBank China Venture Capital (SBCVC), according to an August 20 press release.

The multi-million dollar investment round, whose final amount was not disclosed, also included participation by Baidu Ventures (BV), Danhua Capital, and Fenbushi Digital.

Atlas Protocol was formed by Nebulas Labs and the xGoogler Blockchain Alliance (xGBA), with co-founder of Jide Technology and the “first engineer” of Google Adwords Jeremy Zhao, as well as Professor Ronghui Gu of Columbia University, acting as technical advisors for Atlas Protocol, according to the press release.

ATP plans to develop a blockchain ecosystem and “construct a new paradigm of interactive marketing.” The press release states that ATP allows for the ranking of “onchain targets’ value and enabl[ing] value circulation through tokens,” with the use of the ATP Smartdrop service application.

The xGoogler Blockchain Alliance was formed in April of this year to to create a community for all ex-Google employees interested in blockchain.

In June, Chinese Internet giant Baidu had announced it was developing its own blockchain protocol aimed at reducing mining energy consumption.

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Y Combinator Reveals Ex-Baidu Blockchain Bull Qi Lu as CEO of New China Division

The Ex-COO of ‘Chinese Google’ Baidu and blockchain bull Qi Lu has joined Y Combinator (YC) to run the company’s new China-based division, according to a blog post August 14.  

Y Combinator –– the major Silicon Valley-based entrepreneurial accelerator that funded such startups as Dropbox, Airbnb, Coinbase, Reddit, among others –– announced that is has officially entered the Chinese market, launching a new division of the company there.

The company also announced that the new division will be launched and run by ex-Baidu exec Qi. In the announcement, YC president Sam Altman said he expected Qi to “build a long-term local organization that will combine the best of Silicon Valley and China and create a lot of innovation.” Altman added:

“Qi embodies all of these values, and China has been an important missing piece of our puzzle — the entrepreneurial energy and talent there is an amazing force.”

In an interview published today, August 15, in local media outlet 36Kr, Qi revealed that he is “optimistic about blockchain technology,” noting among its benefits the protection of privacy and data integrity. Qi also underlines that “blockchain technology may bring innovation in the long-term incentive mechanism.”

As Cointelegraph reported in April of this year, Baidu had launched a blockchain-based image rights protection platform called Totem.

Previously, this winter, the largest online retailer in China JD.com revealed its plans to launch a blockchain startup incubator “to build new businesses and create and test real-world applications of their technologies at scale.”

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Baidu's Blockchain Photo App Launches With Its Own Token

Chinese internet search giant Baidu has launched a proprietary token to incentivize users of its new blockchain-based photo validating and sharing service.

The firm announced on Wednesday during a press conference in Beijing that the photo sharing platform – called Totem – is now live and features a dedicated token called Totem Point, according to a local news report. The launch marks the first blockchain application to be released on Baidu’s private XuperChain network.

Baidu said it will initially generate 4 billion Totem tokens with an annual inflation rate of 4.5 percent to encourage individuals and institutions to submit original photographs.

According to a white paper also revealed today, the quantity of tokens awarded will depend on the validation process, including the quantity and quality of images submitted by a user.

Whether or not the Totem token can be traded for cash or other cryptocurrencies has not been disclosed as yet. Similarly, its full use case scenarios have not been spelled out, although Baidu did say that the token could ultimately be used across different applications built on top of the XuperChain network.

Baidu first announced the Totem initiative in April – without mentioning the token – describing it as a distributed platform that creates a traceable chain of tamper-proof data to protect photo sharers’ intellectual property.

After platform users upload their original images through the application, the blockchain’s participating nodes, such as invited third party photo stock agents and copyright protection organizations, will validate the originality of the images. If approved, the nodes timestamp the images’ critical information and store it on Baidu’s blockchain, producing verifiable data that could be vital in the event of a copyright dispute later on, the company said.

As a next step, Baidu aims to expand the blockchain rights protection system to include other types of digital media asset such as videos, an addition expected by the first quarter of next year.

Photos image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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‘Chinese Google’ Baidu to Release Interstellar Blockchain Game

Chinese search engine Baidu has created a blockchain-based game called “Du Yuzhou” (The Universe) where users will receive “elements” to build their own planets while using blockchain features, Coindesk reports Friday, June 8.

The website announces an “open blockchain interplanetary journey,” describing the game as “a magical world made up of all kinds of rare elements” with each user having a “unique planet” that can be explored.

The site notes that each user will receive 100 random elements in an air drop when the game launches — the more elements a user has, the larger the planet grows, thus increasing its gravity and allowing it to get more elements that unlock “mysterious functions.”

Earlier this week, Baidu announced the release of a blockchain protocol aimed at reducing mining energy consumption called the “Super Chain.” In April, Baidu had already released a blockchain-based image rights platform that prevents infringement of copyrighted images.

Blockchain-based games are not new to the crypto space. Ethereum’s CryptoKitties, a digital kitten collectibles game, made more than $12 mln in sales last December.

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Search Giant Baidu Is Launching a Blockchain Space Game

Chinese search giant Baidu revealed on Friday that it is launching a blockchain gaming app, just days after it revealed a proprietary platform called SuperChain.

Dubbed Du Yuzhou – which means “The Universe” in literal translation – the game depicts a blockchain-powered space journey where users, by participating in the blockchain, would receive “elements” to build their own planet.

The elements – much like token rewards generated by a blockchain – will initially be available through airdrops, according to the game’s official website. As users accumulate more elements, they will be able to develop their own planet that, as it grows, will increase its gravity to absorb yet more elements allowing additional features to be unlocked.

In essence, the goal of the game is allow users to experience features that could arise from cryptocurrency-like assets, besides simply being traded, a representative from Baidu told CoinDesk.

“Du Yuzhou is not to launch another cryptocurrency, but a digital society experiment,” the company said. However it declined to share more details about the game, such as which blockchain is being used, only saying the app is expected to go live next week.

On Monday this week, Xiao Wei, chief scientist at Baidu’s blockchain arm, revealed the company’s SuperChain platform, which it claims is compatible with the bitcoin and ethereum networks and can scale to allow 100,000 transactions per second.

Last month, the search giant also started storing the revision histories of entries on Baidu Baike – its Wikipedia-like encyclopedia service – on a blockchain.

Du Yuzhou game image via official website

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Internet Giant Baidu Unveils Energy-Efficient ‘Super Chain’ Blockchain Protocol

Chinese internet giant Baidu has announced the next step in its blockchain integration in the form of a protocol aimed at reducing mining energy consumption, according to a report by China News Weekly today, June 3.

Dubbed ‘Super Chain,’ chief scientist at Baidu’s blockchain division Xiao Wei revealed the protocol at a local conference over the weekend.

The move forms the latest in a series of increasingly direct experiments with cryptocurrency for Baidu, which launched its Blockchain-as-a-Service (BaaS) solution in January this year.

Super Chain can “insert and remove consensus mechanisms to solve the current energy consumption problem,” Wei explained, and is also “compatible with the development system of Bitcoin and Ethereum.”

Baidu has already released one blockchain-based product since the BaaS rollout, this coming in the form of a digital image property rights management platform in April.

As China’s big business gets to grips with blockchain and even the president champions its potential, authorities are planning hard-and-fast regulations for the industry. Last month, Beijing announced ‘standards’ would be in place by the end of 2019.

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Baidu's 'Wikipedia' Now Logs Revisions on a Blockchain

Baidu Baike, the Chinese search giant’s equivalent to Wikipedia, is now using blockchain technology to record items’ revision histories in a move aimed to bring transparency and traceability to the online service.

Although Baidu has not publicly announced the integration, searches on the service are already showing that every entry’s previous revisions are now recorded on a blockchain with a specific hash value.

In a WeChat conversation, a representative from Baidu told CoinDesk that the service was first made visible to the public on Monday, although the hashing may have started last week, based on the timestamp of some of the earliest revisions.

Since the service is deployed on Baidu’s own blockchain platform, however, the hashed data cannot be accessed in order to determine exactly which of a revision’s details are being recorded on the blockchain – for instance, whether they include the time of the revision, name of the contributor and reasons for revision.

While the Baidu spokesperson declined to address technical questions, they did say the end goal of the integration is to help ensure the encyclopedia’s credibility, as, like Wikipedia, anyone can make edits to content.

Launched in 2008, Baidu Baike primarily serves the Chinese community since its global counterpart, Wikipedia, is currently blocked within the country.

According to Baidu’s own data, as of February of this year, the encyclopedia site holds over 15.2 million entries with some 6.4 million voluntary contributors making revisions.

The news marks the latest effort by the Chinese search giant in its experiments with blockchain technology.

As previously reported by CoinDesk, after launching its own blockchain-as-a-service platform in January this year, Baidu moved to trial different blockchain-based applications such a CryptoKitties knock-off and most recently a blockchain-based stock photo service.

Baidu image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.