Chinese microblogging platform Weibo has blocked the official accounts for two prominent cryptocurrency companies including a major exchange platform citing violations of laws and regulations, blockchain media The Block reported on Friday.
Why it matters: The move comes as China’s financial regulator tightens scrutiny of blockchain and cryptocurrency companies.
- President Xi Jinping’s public remarks on the importance of blockchain applications last month as well as the central bank’s digital currency push had lifted the spirits of many in the blockchain industry in recent weeks. Signs of a thaw in China’s hard stance against cryptocurrency boosted bitcoin prices and spurred a flurry of Chinese blockchain-related activity.
Details: Official accounts for Binance and TRON Foundation on Weibo now display a message that reads: “This account has been reported over violations of laws, regulations, and the relevant Weibo Community Pact, thus is no longer visible to users.”
- Weibo accounts for Binance CEO Zhao Changpeng, known as CZ, and TRON Foundation founder Justin Sun remain up and running.
- Official accounts for large cryptocurrency firms based in China or founded by Chinese including Huobi, NEO, OKEx, and ONTology have not been affected by the ban.
- The timing of Weibo’s clampdown on cryptocurrency companies coincides with renewed scrutiny from Shanghai regulators. Shanghai Internet Finance Rectification Agency and the Shanghai Bureau of the People’s Bank of China (PBOC) issued a notice on Nov. 14 ordering regulators in each district of Shanghai to thoroughly inspect local cryptocurrency-related services before Nov. 22 and report to the PBOC, according to reports (in Chinese). The probe is targeting companies that conduct cryptocurrency trading or token sales, or are involved in the promotion and distribution of tokens from overseas initial coin offerings (ICOs).
Context: President Xi Jinping’s public endorsement of blockchain development in late October has spurred a slew of government-led initiatives. The recent optimism also encouraged Chinese firms including crypto mining equipment makers Canaan Inc. and Bitmain to revive initial public offering (IPO) plans.
- Malta-based Binance, one of the largest cryptocurrency exchange platforms in the world, has an office in Shanghai. In October blockchain media Cointelegraph reported the company was planning to open another office in Beijing—an indication of warming relations between the company and its home country. The platform had moved out of China in 2017 amid a nationwide crackdown on cryptocurrency trading.
- Singapore-based TRON Foundation also has offices in China. The company attracted the spotlight in June after Sun won a charity auction with a record $4.57 million bid for lunch with Warren Buffet. Shortly after, the company was accused of being associated with a multi-million dollar Chinese Ponzi scheme.
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