The final crackdown? China moves to completely ban and block cryptocurrency trading at home and abroad

China’s central bank, the People’s Bank of China, has announced that it aims to crackdown on cryptocurrency trading with bans on both domestic and international trading platforms, The Paper reported on Sunday (in Chinese).

According to the report, supervision of cryptocurrency trading will continue to increase. This will include bans on related commercial activity and on both domestic and overseas cryptocurrency trading platforms. Authorities aim to shut down and block all exchanges they uncover but they do not rule out the possibility of introducing stricter regulatory measures. What those measures might be is unclear.

Officially, the ban on big cryptocurrency exchanges and ICOs implemented in September 2017 has been effective in mitigating potential financial and social risks. According to the report, the amount of cryptocurrency trading in RMB made up 90% of the total volume of global transactions but the number is now down to 1%. Unofficially, however, many Chinese citizens have been trading through platforms outside of China by using online circumvention tools. Currently, Japan and Hong Kong are the most popular places to trade cryptocurrency for Chinese citizens.

China’s crackdown on initial coin offerings (ICO) and the biggest bitcoin exchanges in the country—OKCoin, Huobi, and BTCC—started in September last year. The move, however, has not managed to dampen Chinese traders’ enthusiasm for cryptocurrencies. Many have resorted to peer-to-peer exchanges on the private over-the-counter (OTC) market.

At the beginning of January, regulators froze a number of Bitcoin OTC trade accounts across the country. Some of them were worth millions of dollars, such as the ones in southern cities of Shenzhen and Guangzhou which were valued more than RMB 300 million ($46.1 million). Regulators also decided to move towards lowering incentives for bitcoin mining although the practice has not been banned entirely.

On January 26th, China Internet Financial Association issued a warning to investors reminding them that offshore cryptocurrency trading platforms carry the same systemic risks including market manipulation and money laundering.