Cryptocurrency Crackdowns in Asia
7 Jul 2021 — The crypto market has dropped dramatically for the past 2 months, amid fears over China’s crypto crackdown. With bitcoin mining ban and censorship since May, over 90% of mining capacity are most likely be shut down.
The saying “When China sneezes, bitcoin catches a cold” holds true especially when China has long been home to more than half the world’s bitcoin miners. What’s more, China’s central bank announced recently that it was ordering banks to crack down on cryptocurrency trading.
Aside from China, for the past months, many countries in Asia too has been cracking down and tightening their regulations on cryptocurrencies.
Although India hasn’t formally banned cryptocurrencies, India’s central bank is informally urging lenders to cut ties with cryptocurrency exchanges and traders as the highly speculative market booms, despite a Supreme Court ruling that banks can work with the industry, according to a Reuters report.
Crypto exchanges are now required to ensure their customers have real name bank accounts and they are also required to partner with domestic banks to establish real name accounts for their clients. However, the reluctance of banks to partner with cryptocurrency exchanges because of negative comments by regulators on virtual assets and the risk of financial crimes on cryptocurrency exchanges, means that a lot of cryptocurrency exchanges could be forced out of business.
In April this year, Binance, the world’s largest cryptocurrency exchange, has come under fire in Hong Kong for unlicensed and suspicious behaviour. Binance’s marketing of security token based on Tesla stocks raised questions about Hong Kong licence which Binance did not have according to SFC records.
This turned out to be the beginning of a bad streak for Binance. Late last month, Japan’s Financial Services Agency (FSA) has issued another warning to crypto exchange Binance for operating illegally in the country, which followed by its ban in the UK.
Subsequently last week, Thailand SEC files a criminal complaint against Binance for operating digital asset business without license.