Senior Official Claims, 25,000 Blockchain Firms in China Tried to Issue Cryptos

Tens of thousands of Chinese blockchain companies may have tried to issue their own cryptocurrencies, a senior official claims.

Senior Official Claims, 25,000 Blockchain Firms in China Tried to Issue Cryptos
Senior Official Claims, 25,000 Blockchain Firms in China Tried to Issue Cryptos

Led by the Chinese central bank, five financial and technology authorities jointly published the Bluebook of Blockchain on Thursday, outlining illegal and fraudulent schemes in the blockchain industry.

Approximately 89 percent of blockchain firms in China – some 25,000 – might have tried to create and issue their own tokens, while only 4,000 are fully focused on blockchain applications, Yedong Zhu, president of the government-backed nonprofit Beijing Blockchain Application Association, said in an interview with Chinese state media CCTV at the report’s launch.

The most common crypto issuance process, the ICO, has been deemed illegal by the Chinese government after its 2017 crackdown. However, it still allows crypto mining operations and possession of crypto assets in the country. 

The findings come amid the Chinese government’s most recent crackdown on barred financial operations related to ICOs and crypto trading. Major Chinese cities, such as Beijing and Shanghai, have rolled out inspection plans with a view to shutting down any remaining crypto exchanges. 

The authorities have gone so far as to close any marketing firms that promote crypto companies and those that masqueraded as blockchain companies to launch ICOs. 

According to the report, more than half of the 28,000 blockchain companies are based in the Guangdong province of southern China, next to the Chinese Silicon Valley Shenzhen, while the rest generally run their operations from Beijing and Shanghai.

“We need to make sure the blockchain firms that illegally raise funds and commit financial frauds are not included in the government blockchain support programs,” Zhu said

The report is one of the three “bluebooks” that guides Chinese authorities on how to regulate the emerging fintech industry. The other two reports focus on technologies used by regulators and financial technologies.