State-owned newspaper cautions Chinese crypto investors despite trading ban
Quick Take
- State-owned newspaper Economic Daily wrote that investors should “stay cautious” about bitcoin-related products despite the recent bitcoin price rally.
- China banned all crypto trading and mining activities in September 2021, but many Chinese mainland investors still found ways to circumvent the rules and trade overseas.
Chinese state-owned media publication Economic Daily published an article on Sunday to warn against the risks associated with bitcoin amid the cryptocurrency’s recent rally, as China continues to ban crypto trading activities.
Jingji Ribao, or Economic Daily, a state-owned newspaper, wrote that investors should “stay cautious” about bitcoin-related products and that bitcoin has yet to enter the mainstream.
The article noted that while the U.S. has allowed the listing of spot bitcoin exchange-traded funds (ETFs), China continues to enforce a ban in crypto trading. The article cited Xiao Sa, a lawyer based in Beijing, saying that the sweeping ban means that overseas bitcoin ETF dealers can not sell relevant financial products to Chinese residents, and that investors in the Chinese mainland are also not allowed to directly purchase such products.
In September 2021, the People’s Bank of China, the Supreme People’s Court and several other central authorities issued a notice banning all crypto trading activities on the mainland. The ban clarified that services provided by overseas crypto exchanges to Chinese residents on the mainland are considered illegal financial activities. Many investors, however, still found ways to circumvent the rules and trade overseas.
The price of bitcoin rallied above the $60,000 mark last week and briefly breached $64,000 on Monday morning in Asia. The world’s largest crypto by market capitalization rose 2.44% in the past 24 hours to trade at around $63,600 at 12:30 p.m. Hong Kong time on Monday, according to The Block’s Price Page.
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