Blockchain regulation seems to be the top priority of China's Cyberspace Administration (CAC).
Blockchain regulation seems to be the top priority of China’s Cyberspace Administration (CAC). The sole internet regulator monitors not only web traffic but online businesses as well. And guess what? Blockchain and tech companies make no exception.
Since February, every firm willing to do business in the field of blockchain technologies should register within CAC and wait for its approval before start operating. According to Global Times, 197 companies have already been granted their approval certificates.
The Director of the DCCI Internet Research Institute Liu Xingliang was quoted by Global Times as saying:
“In the last few years, the lack of regulations on cryptocurrency-related blockchain technologies did play some havoc with the market, causing losses for many investors and a huge electricity waste, especially by Bitcoin miners. […] But it is undeniable that this emerging technology does have a lot of potential. I believe the government is being very cautious while trying to provide a controllable environment for companies to explore its application.”
Among the first to comply with the new regulations were Baidu (as Baudi Blockchain Engine), Alibaba (Alibaba Cloud Blockchain-as-a-service), and Tencent (TbaaS). However, it’s not only tech giants featured on CAC’s list. Domestic financial institutions such as Ping An Insurance and China Zheshang Bank have also complied with the latest regulatory frameworks. The full list is available here (in Chinese).
The changes implemented in February are the government’s response to the unregulated ICO market that caught many investors unprepared.
“In the past, when the market was barely regulated, the technology was abused by some unruly companies, some of which were scammers, to lure small investors. Now with the participation of big companies, legitimate research and development of the technology are now possible, and chances are now much higher for a safe future with blockchain technology,” Liu elaborated.
Businesses that run unregistered coin offerings are deemed illegal and are prosecuted by law. On the other hand, there are numerous cases on which companies claim false registration. For instance, a Bulgarian company utilized this tactic in order to trick investors into believing it is registered within the UK Financial Conduct Act.