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China: Hodling Bitcoin (BTC) and P2P OTC Trading is Legal

China Prompts Bitcoin Boost

Good news for the Chinese crypto community. Xiao Wei, a Council Member at the Law Research Association of the Bank of China, shared with the local media that, despite the ban, Chinese citizens can safely hold Bitcoins (BTC) without this being considered a crime or an illegal activity.

According to the expert, the Chinese legal system expressly prohibits ICOs, but has a different view regarding the possession of cryptocurrencies and the rights associated with them:

“In 2013, China gave a clear definition of the legal nature of Bitcoin itself: a specific virtual commodity, that is, its status as a “property”. The General Principles of Civil Law, implemented on October 1, 2017, reconfirmed that virtual property is protected by Chinese Law.

Xiao Wei analyzed that based on this, owning Bitcoin is legal in China.”

Likewise, being crypto a legal property, OTC trading is also not considered a crime. The expert explains that according to the laws, this would be an act of “disposition of power” in which one person transfers to another an asset along with the rights associated with it. “How to dispose of it is the private right of the owner, and others have no right to interfere,” he explained

China: The Bitcoin Ban Doesn’t Attack Trading Per Se, But its a Powerful Resource Against Scammers

Xiao’s statements provide some clarity to the ecosystem. The
Chinese government has a restrictive policy that seeks to reduce the activities
associated with cryptocurrencies, especially because of the negative perception
that exists around the ecosystem.

Flag of China
China Flag

According to BJNews, there are currently 461 court judgments
related to “Bitcoin” and this trend increases over time. In the last
5 years, the evolution was from 9 pieces to 26, then to 54, then 120 and then
216.

However, there is still no need to be overexcited. The
government maintains its ban and there is a very thin line between what is
legal and what is illegal.

According to sources, Xiao Wei has maintained constant communication with other lawyers and there is a general agreement that according to the Country’s Criminal Law, non-p2p trading may fall under the Article 225, numeral 3 of the Criminal Law, “Other illegal business operations that seriously disrupt market order”.

However, although it may be considered legal, there is also
no law that expressly says so. This has generated many conflicting opinions
among legal experts.

One example is Wang Deyi who explains that from his point of view “Bitcoin transactions in China are in violation of national regulatory policies, and bitcoin-based over-the-counter transactions are difficult to obtain legal recognition.”

So far almost all arrests and prosecutions associated with
cryptocurrencies in China have been the result of fraud against third parties.

The post China: Hodling Bitcoin (BTC) and P2P OTC Trading is Legal appeared first on Ethereum World News.

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Chinese Entering Bitcoin As Safe Heaven, Driving Recent BTC Price Surge: Forbes

As a trade war between US and China has taken off, the US is raising trade tariffs with Chinese yuan rate going down and people starting to use crypto as a safe heaven.

Several major factors have been named earlier this week to have driven the current 40% Bitcoin surge. Among them the acceptance of Bitcoin by such giants as Starbucks, Whole Foods and others. Another reason is Bakkt preparing to launch Bitcoin futures. The third one was a rumour that eBay online commerce heavyweight is planning to start accepting crypto payments.

The latter was, however, debunked by a company’s spokesperson at Consensus 2019 as Ethereum World News reported earlier. He said:

Cryptocurrency is not accepted as a form of payment on the eBay platform, nor is it part of our payments strategy.

Now, Forbes suggests one more possible reason for the recent major rise of Bitcoin quotes.

Yuan is going down

Since the US president Trump has announced a rise in tariffs on Chinese goods, China is about to do likewise. The first event is causing the yuan to go down 2 percent, the news of the second one has made the US stock markets to decrease in value, Dow Jones index in particular, lost 696 points on Monday.

Now Chinese are afraid that in order to oppose the US in this trade war and maintain China’s goods price-competitive for US citizens, Chinese government would devalue the yuan substantially.

Chinese investors are going
for crypto

As per Forbes, analysts, including Dovey Wan from a VC firm DHVC and a co-founder of a crypto company Primitive Ventures, believe that the price charts of Bitcoin and USD/CNY exchange rate now look somewhat similar.

Other crypto analysts confirm that investors in China are actively purchasing stablecoins, Tether in particular, to get their money out of China and Hong Kong and get out of yuan. And this could be the reason for the recent Bitcoin massive surge, they say.

As reported by CNBC, Andy Brenner from National Alliance Securities believes that Bitcoin is another way Chinese investors are trying to hedge their current risks for fear that yuan may drop even deeper. He said:

If you were in China and you wanted to diversify, it would seem logical that Bitcoin would be a short term alternative.

Chinese authorities resist
Bitcoin

The Chinese government has been fighting against everything to do with crypto since autumn 2017, when they implemented a ban on ICOs. The next step was to prohibit the work of local crypto exchanges and preventing traders from using those located abroad.

Now, authorities are considering banning crypto mining in China, saying that this industry is dangerous for the environment.

However, OTC crypto trading is still being conducted in China – via WeChat
groups.

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Blockchain Research Institute Chairman Says Chinese Renminbi Will Become Crypto in 20 Years

Chinese Renminbe RNB Cryptocurrency

China has been notoriously harsh on the development of cryptocurrency, imposing a ban on investing and trading into digital assets, including Bitcoin. However, the executive chairman for the Blockchain Research Institute believes that in 20 years, Chinese national fait currency will be replaced by a cryptocurrency version.

Donald Tapscott, speaking in an interview with Bloomberg on April 17, said that the Chinese renminbi (RMB), will likely undergo a transformation into cryptocurrency format, despite the country’s current stance against the industry. Tapscott told Bloomberg of a meeting he had with a vice-chairman in the Communist Party of China, who revealed that President Xi Jinping is bullish on the outlook of blockchain and views it as one of the most important technologies for his country’s development.

China, which has caused a recent stir with rumors that the country will crackdown on cryptocurrency mining–in addition to its current stance towards trading and investing–state that the ban was likely short-lived,

“It’s not really necessary to do that [to ban exchanges and mining] because in 20 years we are not going to be using bitcoin in China. Chinese people will use the RMB, only the RMB will become a cryptocurrency. The central bank of China will turn it into a digital currency.”

Industry analysts have pointed to the development of decentralized exchanges (DEXs) as a way to circumnavigate political influence on cryptocurrency marketplaces. While Tappscott contends that DEXs are one way to operate in China, he reports that the country is adamant on clamping down on all forms of crypto-based investment.

Instead, Tappscott believes that the future of decentralized exchanges is to supersede existing centralized platforms, thanks to what he calls their transparent framework and ability to identify manipulation. Tappscott could see a broader market migration to DEXs, including securities.

Despite having the majority of the world’s largest mining pools based in China, the country is giving indications of a looming crackdown on cryptocurrency mining. Chinese authorities have been discussing the issue, with the National Development and Reform Comission (NDRC) reportedly including mining in a revised list of activities to be shut down. Among a number of issues, the agency finds that cryptocurrency mining wastes resources and pollutes the environment, harping on the point that Bitcoin is not energy efficient.

However, China is also leading the world in the number of blockchain projects under development, despite the government’s stance towards investing in cryptocurrency. Even if digital assets continue to be a point of contention for politicians, the technology of blockchain has garnered serious interest, with 263 blockchain-related projects underway–a full quarter of the global total.

Tappscott’s comments reflect a growing belief that tokenized currencies, supported by blockchain, will be the future for fiat as money turns digital. The renminbi, propelled by China’s massive boost in blockchain development, could make the transition to cryptocurrency even if the government ban continues. Compared to other countries, the Communist Party of China seems primarily concerned with staying ahead of regulatory control over crypto, even if they recognize the value of the underlying technology.

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Chinese Crypto Traders Find Ways To Skirt Government Crackdown

Rules Are Meant To Be Broken? 

To many in the crypto community, intense government intervention or regulation is not a problem, as a majority of nations across the globe are somewhat open to the use and propagation of crypto assets. However, as reported multiple times by Ethereum World News in the past few weeks, China-based regulators have been doing their utmost best to clamp down on the development, use, and trading of cryptocurrencies within the country’s borders.

Some of the measures the government took include, silencing crypto discussion on online forums, banning cryptocurrency-related events, restricting 124 foreign crypto exchanges, blocking access to eight crypto-centric news outlets on WeChat, and also banning Alipay accounts that have been suspected of facilitating crypto trades.

But as the old saying goes, “rules are meant to be broken.” Cryptocurrency firms and traders within the country have evidently taken this saying to heart, doing their best to skirt the bans by introducing ingenious solutions and workarounds.

As per a recent report from the South China Morning Post, despite Beijing’s attempt to shutter local exchanges, executives and employees within these firms have sought to avoid the ban by utilizing a series of domains to get their exchanges to the public via alternative means, albeit in less than ideal manner.

By moving their servers and legal operations outside of Chinese borders, these firms can essentially bypass a majority of the legal risks of propping up an exchange in China, which become classified foreign exchanges at that point. Speaking on the matter, Terence Tsang, the chief operating officer of TideBit, which maintains a series of crypto exchanges in Hong Kong and Taiwan, stated:

The latest warning and potentially increased monitoring of foreign platforms is targeted at a batch of smaller exchanges that had claimed to be foreign entities, but are in fact operating in China claiming they have outsourced their operations to a Chinese company… Those exchanges whose website landing pages are in Chinese have drawn particular scrutiny by regulators.

However, despite these updated exchange “website landing pages” drawing substantial amounts of scrutiny from regulators, industry leaders said that as long as an exchange’s server remains outside of China, that it would be a “huge challenge” for governmental bodies to stamp out all instances of cryptocurrency trades and transactions.

China’s Alternative Mode Of Crypto Trading

The South China Morning Post went on to describe how Chinese crypto investors have been trading following the ban. First prospective traders will need to find a way to purchase Tether tokens for Yuan, which can be done via exchange sites that offer Tether-to-yuan trading after the two sides of the trade submits fulfill the proper KYC requirements. The “exchange” oversees the trades, ensuring that both sides of the agreement get what they were asking for.

Sources told the SCMP that money will be transferred from bank-to-bank, or via third party payment networks, like AliPay or WeChat. Once the Tether appears in the wallet of the trader, he/she/they can trade these tokens on foreign exchanges through the use of VPNs and similar programs.

Photo by 郑 无忌 on Unsplash

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Blockchain Evidence is Legally Binding, says China’s Supreme Court

The Supreme People’s Court of China has issued a set of new rules on the trial of internet court cases, part of which is that blockchain can authenticate electronic data entered in as evidence.

Blockchain Authentication

The court’s ruling issued on Friday sets out new rules to guide the activities of internet courts, and protect the legal rights of disputing parties. A portion of the new regulations relates to the authentication of electronic data presented as evidence:

The electronic data submitted by the parties can prove their authenticity through electronic signature, trusted time stamp, hash value check, blockchain, and other evidence collection, fixed and tamper-proof technical means or through electronic forensic evidence platform certification. [a rough translation]

Data stored or retrieved with distributed technology are now admissible in Court. Also, in instances where electronic data entered in as evidence in a case is questioned by any of the parties involved, the data can be authenticated using blockchain technology.

This new ruling by the Supreme Court agrees with the precedence set by Hangzhou Internet Court earlier in the year.

In a case between a media company and a technology company, Hangzhou Internet Court ruled that decentralized technology can be used as a method to determine the authenticity of the digital information presented as evidence.

Internet Court was instituted due to the rising numbers of online trade disputes and copyright infringements in the country. The Hangzhou Internet Court is the first, and it was instituted in August 2017. The government plans to launch internet courts in two other cities – Beijing and Guangzhou.

China Picks Blockchain Over Cryptocurrencies

Despite the relentless crackdown on cryptocurrencies in the country, the Chinese Government is eagerly embracing blockchain technology.  On the one hand, the government banned ICOs and domestic cryptocurrency trading and exchanges and restricted crypto-related online content. On the other hand, it is also adopting distributed ledger technology in trade and other sectors.

In April, EWN reported that state-owned Sinochem Energy Technology Co Limited completed a shipment of gasoline to Singapore using blockchain technology.

Private Corporations in the country are also adopting the blockchain technology and driving decentralized technology-related innovation globally. Chinese company’s like Tencent and Alibaba are leading the global blockchain patent race.  56% percent of all issued distributed technology-related patents in the world belong to Chinese companies.  Even the country’s Central Bank is also not left out, issuing 68 filings for DLT (Decentralized Ledger Technology) patents.

The post Blockchain Evidence is Legally Binding, says China’s Supreme Court appeared first on Ethereum World News.

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China Goes All Out On Blockchain Patents Amid Crypto Ban

China Greets Blockchain With A Smile

Since Bitcoin’s inception, the terms “blockchain” and “cryptocurrency” have gone hand-in-hand, with many using the two words to complement each other in a similar context. Although it is widely understood that the acceptance of blockchain directly implies the acceptance of cryptocurrencies, China has taken a different approach, with innovators within the country seeking to propel the development of blockchain technologies, while hampering the adoption of cryptocurrencies at the same time.

As per a report from the Asia Nikkei Review, an Asia-based news outlet, Chinese firms have clearly led the blockchain-related patent race, with Alibaba alone accounting for more than 10% of the world’s blockchain patent applications. China’s infatuation towards blockchain innovation has reportedly taken the entire country by storm, with internet giants such as Tencent and Baidu issuing a staggering 56% of 406 worldwide patents.

To put this 56% statistic into perspective, the U.S., which is unarguably the world’s foremost technological superpower, is only responsible for 22% of blockchain-centric patent filings.

As per a chart from the report (seen right), the People’s Bank of China takes the cake when it comes to the most decentralized ledger technology (DLT) patents

chinaImage Courtesy of The Nikkei Asian Review

filed by an individual entity, with China’s central bank issuing 68 filings in recent years. Following the PBOC’s 68 patents is Alibaba, Bank of America, nChain Holdings, Beijing Rui Josie Technology Development, Mastercard, Jiangsu Tongfudun Information Technology, Cloud Minds (Shenzhen) Technologies, China United Network Communications and Hangzhou Qulian Technology.

John Eastwood, a Taiwan-based partner at Eiger Law, commented on China’s unrelenting drive for blockchain adoption and development, stating:

Blockchain is a new technological landscape where it could be very profitable for Chinese companies to grab significant territory in their patent claim language. Holding several patents helps to give an aura of legitimacy that helps many companies in the blockchain field to attract investors or acquirers.

Chinese blockchain trailblazers have found a good variety of industries to apply DLT to, including supply chain management, global financial transactions (remittance), postal services, healthcare, and more.

Alibaba’s Blockchain Drive

Alibaba, China’s 2nd most valuable company, has taken a rather open-minded approach when it comes to blockchain. Jack Ma, Alibaba’s founder and one of the most well-known entrepreneurs in the world, has openly endorsed DLT. Speaking at the launch of his firm’s blockchain-centric remittance service in Hong Kong, Ma stated:

Blockchain technology can help overcome the challenges of security, sustainability and inclusion. It could change our world more than people can imagine.

And it seems that the firm hasn’t taken an ‘all talk, no action’ approach,  with the $450 billion giant making a series of moves to accommodate blockchain technologies in recent months. Most recently, Alibaba has begun exploring the use of blockchain in healthcare, partnering with the city of Changzhou to verify and “secure” a patient’s medical data on a blockchain.

While China has undoubtedly taken a leading role in the so-called ‘blockchain revolution’, the heavy-handed government seems to be hesitant to say yes to cryptocurrencies, or at least for now.

Photo by Theodor Lundqvist on Unsplash
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China Clamps Down Again — Silences Online Crypto Discussion

China Shuts Down Popular Online Crypto Forums

The second coming of China’s crypto police has seemingly arrived, with the Asian country enlisting measures to cease the propagation of this nascent asset class over the past two weeks.

Most recently, Baidu, China’s most popular search engine, has begun to restrict access to crypto-centric forums, discussion boards, and chat rooms on the country’s intranet, which has become infamous for blocking access to western webpages. Per a report from the South China Morning Post, which originally broke this news, the forums affected, known as the “digital currency bar” and “virtual currency bar,” will be unavailable for any Chinese citizens using the Baidu system.

If any user attempts to access these forums, they will be prompted with a message that states:

“(These sites are closed) in accordance with relevant laws, regulations, and policies.”

It is clear that with this move, the local government is intending to cease any discussion pertaining to crypto assets, so that it may fade out of the public eye and become nothing more than a distant memory. But as the age old saying goes, “rules are meant to be broken,” so it is likely that diehard crypto enthusiasts will eventually find some way to circumvent the ban.

Crypto Event Ban Fever Sweeps Across The Country

As reported by Ethereum World News, Beijing’s Chaoyang district government banned crypto-focused events just last week. According to a government release, all commercial venues, like hotels, malls, offices etc., were thereby banned from hosting any activities or events that put cryptos at the front and center.

While this was bad enough in and of itself, as Chaoyang is essentially Beijing’s downtown equivalent, it was recently revealed that Southern China’s Guangzhou special economic region has made a similar announcement. The Guangzhou Development District, which has been classified as an exclusive special economic zone, now disallows any crypto-related event as aforementioned.

The local government noted that this ban was to “maintain the security and stability of the financial system,” alluding to the fact that regulators see crypto as a potential threat to the government-run financial infrastructure that has been established. Now that two important regions within China have banned crypto events, it is likely that this ‘fever’ will, unfortunately, sweep across major cities in the economic powerhouse in due time.

China’s Relentless Crusade To Curb Crypto

Since the infancy of this industry, China has dominated the landscape, taking a forefront of the development and use of blockchain and crypto in legacy systems. However, as the price of crypto assets surged in 2017, the government began to crack down on the propagation of such assets, by reportedly issuing a blanket ban over cryptocurrency trading and ICO funding.

But this seemingly hasn’t worked, with some weaseling their way around the bans by establishing secret groups and alternative methods of buying/selling crypto with fiat. This has prompted the government to crack down on this industry for the second time. Some of the government’s other measures include banning 124 foreign crypto exchanges, restricting access to eight crypto-centric news outlets on WeChat, and also banning Alipay accounts that have been suspected of facilitating crypto trades.

It is unlikely that the Chinese government will end their crusade anytime soon, but many are hopeful that they will not do their utmost to stamp out crypto entirely.

Photo by Usukhbayar Gankhuyag on Unsplash
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China’s Crypto Crackdown Continues — Alipay Bans Bitcoin OTC Accounts

The most recent round of China’s crypto crackdown has continued, with the Alipay mobile payment processing service banning accounts that are affiliated with over-the-counter (OTC) Bitcoin trading. This news comes via a report from Beijing News, who broke this news in the early morning on August 24th.

The payment processing service in question is the Hangzhou-based (China) Alipay, which is owned by the multi-national conglomerate that is the similarly-named Alibaba, one of the most influential and valuable companies in the world. According to the aforementioned news report, Alipay will now be putting restrictions, or even outright banning accounts that propagate OTC cryptocurrency trading.

Additionally, to prevent future occurrences of OTC trading on the payment platform, Alipay will reportedly keep a close eye on suspicious accounts, while also installing an inspection system for “key websites and accounts” as CoinTelegraph puts it.

While Alipay may seem like a cumbersome method of cryptocurrency trading, after the Chinese government banned crypto exchanges from providing service to Chinese citizens, committed traders had to get creative, hailing in a short era of back-alley transactions and the like.

Red Li, the co-founder of 8Btc, a popular China-based community of crypto and blockchain enthusiasts, confirmed this restriction, relaying the news on his Twitter account.

Ant Financial, which runs Alipay, see “virtual currency trading” as a large risk to its users, hence why the firm hasn’t made a foray into offering crypto exchange services. Additionally, the report added that the firm has planes to “resolutely” strike down accounts that are suspected for virtual currency-related transactions or business operations.

Along with restricting such accounts, Ant Financial added that it will create a “risk prevention education” module for its users, in a bid to “remind users not to be deceived by various false propaganda, to recognize the risks of virtual currency transactions, and to avoid the possible losses suffered.”

China’s Relentless Crypto Aversion

It has become apparent that this move is just another one of the Chinese government’s attempts to stave off the propagation of cryptocurrencies, which they evidently see as a threat to China’s traditional systems. As reported by Ethereum World News, China’s National Fintech Risk office recently identified 124 cryptocurrency exchange platforms that were still available for Chinese citizens.

As China has banned overseas cryptocurrency exchanges time and time again, the country’s firewall quickly swallowed up access to these sites. Along with banning the aforementioned platforms, the governmental organization also noted that it plans to introduce monitoring systems to ensure no foreign exchanges sneak under China’s ‘great firewall’.

In related news, Chinese technology giant Tencent banned over eight crypto-centric news outlets on its WeChat mobile platform, which has become a primary mode of communication in the Asian region. Citing new governmental regulations, Tencent noted that it banned these accounts due to suspicions of “publishing information related to initial coin offerings (ICOs),” along with spreading crypto-related hype.  Last but not least, Beijing’s Chaoyang district has also revealed that it has banned local hotels, shopping malls and office buildings from hosting crypto-related events.

While one of the world’s largest economies still seems to have an aversion towards cryptocurrencies, governmental organizations have still openly endorsed and financially supported blockchain startups that intend to overhaul China’s legacy systems.

Photo by Jennifer Chen on Unsplash

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