China Declares All Cryptocurrency, Related Transactions Illegal

Cryptocurrencies and related transactions are now considered illegal in China, the country’s central bank said Friday (Sept 24) in a statement on its website.

The People’s Bank of China (PBOC) stated that the move was necessary for national security and social stability and would protect investors from risks. Bitcoin tumbled 5 percent as the news became public.

China pointed to the illegal activities surrounding cryptocurrency — money laundering, gambling, pyramid schemes — that disrupt the economy. The statement specifically named bitcoin, ether and tether as examples.

“… virtual currency trading hype activities have risen, disrupting economic and financial order, breeding illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering, seriously endangering the safety of people’s property,” according to the statement.

The new mandate also affects businesses beyond Chinese borders, making it a crime for crypto services operated by overseas exchanges to conduct digital transactions with people in China. The PBOC also indicated that it will collaborate with domestic agencies for comprehensive monitoring.

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