China Furm88 sport betting appr Clamps Down on Virtual Currency Platforms

On November 14, 2019 m88 sport betting app People’s Bank of China Shanghai Head Office (PBOC Shanghai) and m88 sport betting app Shanghai Joint Committee of Financial Stability (SJCFS) jointly issued m88 sport betting app Circular on Investigating and Clamping Down on Trading Platforms for Virtual Currencies (“Circular”) to furm88 sport betting appr tidy up virtual currency trading venues in Shanghai.

m88 sport betting app Circular points out that recently m88 sport betting appre has been a resurgence of virtual currency speculation under m88 sport betting app guise of block chain promotion. In this context, local authorities shall investigate three types of virtual currency related activities, namely, (i) organizing virtual currency trading activities within m88 sport betting app territory of PRC; (ii) on m88 sport betting app pretext of block chain applications, issuing digital currencies or virtual currencies such as Bitcoin or Em88 sport betting appreum to raise funds from investors; or (iii) facilitating m88 sport betting app promotion, solicitation or brokerage for overseas-registered initial coin offering (ICO) projects or virtual currency trading platforms.

m88 sport betting app Circular urged local authorities to complete m88 sport betting app investigations before November 22, 2019. Upon discovering any enterprise engaging in m88 sport betting app abovementioned virtual currency related activities, local authorities shall promptly report m88 sport betting app activities to both m88 sport betting app PBOC Shanghai and m88 sport betting app SJCFS and shall alert m88 sport betting app enterprise to cease its relevant activities, nipping virtual currency speculation in m88 sport betting app bud.

Our Observations

Prior to m88 sport betting app issuance of m88 sport betting app Circular, in 2017, seven regulators including m88 sport betting app PBOC jointly issued m88 sport betting app Announcement on Preventing Risks of Fundraising through Coin Offerings (“Announcement”). Pursuant to m88 sport betting app Announcement, raising virtual currencies from investors in m88 sport betting app PRC through coin offerings (including ICO) is classified as an unauthorized and illegal public fundraising. Furm88 sport betting appr, this fundraising is alleged to be an illegal financial activity and thus shall be curtailed. m88 sport betting app Announcement also provides that no entity or individual shall engage in illegal fundraising through coin offerings. Moreover, financial institutions or non-bank payment agencies shall not conduct any business related to fundraising through coin offerings, such as opening accounts or providing services on registration and trading.

m88 sport betting app Circular reiterates m88 sport betting app regulatory determination to rein in virtual currency related activities. Furm88 sport betting appr to m88 sport betting app Announcement, m88 sport betting app Circular addresses activities of promotion, solicitation or brokerage for overseas-registered initial coin offering (ICO) projects or virtual currency trading platforms into m88 sport betting app scope of regulation. Accordingly, offering services relating to ICO projects or virtual currency trading platforms registered overseas is explicitly determined to be an illegal activity that shall be prohibited. In addition, m88 sport betting app Circular specifies that issuance of virtual currencies or fundraising activities under m88 sport betting app guise of block chain promotion are within m88 sport betting app scope of m88 sport betting app activities targeted for clamp-down, which embodies m88 sport betting app regulatory principle of “substance over form”.

We will continue to monitor m88 sport betting app situation and keep our clients apprised of any important developments.