China’s Banned on Cryptocurrency Trading many Crypto holders are in Shock

October 2, 2021 0 By Joe Hodgson

China banned mining and trading of cryptocurrencies last week. Now many crypto holders are scrambling to deal with the fallout. There are many companies that have made big bets on crypto over the years, especially companies in the tech industry. Now the options for these companies to capitalize on their holdings in crypto may be limited.

The directive from the People’s Bank of China declared all virtual currency-related business activities illegal, cutting China off from foreign crypto exchanges. This could potentially lead to penalties for investors who deal with exchanges overseas.

But the question is arising as to when this ban will come into force as Chinese authorities have not specified the date nor clarified whether the ban will come into force with immediate effect.

According to a report in Aljazeera, Winston Ma, assistant professor at New York University and an expert on global financial regulation, says, “It’s a little unclear when the literal cut-off date is the deadline.

What is the date when someone else is there? There will be no transactions, no more crypto holdings.” Ma said the notice was issued last Friday. Technically the last Friday itself could be considered the effective date, but that too is not specified.

Confused clients are constantly calling, emailing and messaging due to uncertainty. As reported by Aljazeera, L Lee, chief operating officer of Singapore-based crypto asset custodial firm ‘Digital Treasures Management’, says that for anyone trying to convert crypto to Chinese yuan under the new rules, it is relatively would be impossible.

There may exist other options for converting cryptocurrencies such as bitcoin to stable coins on decentralized exchanges and later exchanging it for fiat currency outside China.

Lee also says there are still questions about how the regulations will address past issues that have stemmed from middlemen engaging in trade and potentially carrying out fraudulent activities. Can those activities be punished retrospectively. Will the law come into force from a retrospective date? {Via AxUpdates.com}