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China’s central bank declares all cryptocurrency-related transactions ‘illegal’

China’s central bank has on Friday declared all cryptocurrency transactions illegal. 

With this directive, banks and investors in the country are banned from operating in crypto exchanges. 

The new development, which is a continuation of China’s clampdown on cryptocurrency, has been partly responsible for the fluctuations of cryptocurrencies in the past one year. 

The Chinese government claims the measures are to prevent money laundering amid other corruption acts. 

“Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China (PBOC) said in an online statement Friday, adding that offenders would be “investigated for criminal liability in accordance with the law.”

The notice bans all related financial activities involving cryptocurrencies, such as trading crypto, selling tokens, transactions involving virtual currency derivatives and “illegal fundraising”.

The central bank added that in recent years the “trading and speculation of Bitcoin and other virtual currencies have become widespread, disrupting economic and financial order, giving rise to money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities.”

Recall that the Central Bank of Nigeria (CBN) on Friday, February 5, issued a directive to all banks and financial institutions to prohibit the transaction of cryptocurrency and also close bank accounts that trade in cryptocurrency. 

News of the ban was met with outrage and confusion as Nigeria was a top three adopter of the virtual currencies. 

But rather than force a massive reactive sale of cryptos coins by users, Nigerian crypto traders rushed to buy more cryptocurrencies.

Also Read: Nigerians are buying more cryptocurrencies despite CBN ban – Here are their reasons

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