China Takes Aim at Crypto Market in New Draft for Financial Trials

Officials in China have drafted a proposal for protocols on how to deal with crypto-related financial trials. The country remains concerned about the risks of crypto.

It appears China is working on cracking on the crypto market further, with journalist Wu Blockchain posting about a new draft for cryptocurrency trials. Local media outlets first reported the new draft, with the meeting that discussed the draft focusing on policies and measures that would allow for financial trials.

The draft opens by stating that “the trading hype activities of bitcoin, ethereum, usdt and other virtual currencies seriously disturbed the economic and financial order and seriously jeopardized the property safety of the people.” China has repeatedly made similar statements, and the new draft is an attempt to counter what it believes are risky activities.

Specifically, the proposal relates to the validity of legal acts related to cryptocurrencies. It states that crypto assets have some attributes of network virtual property.

If crypto is used to settle debts, the court would recognize it as valid. However, if investment contracts have been entered after Sept. 4, 2017, they would be recognized as invalid. As for crypto mining, any related contract after the mining ban was instituted would be recognized as invalid.

Hong Kong Wooing Chinese Crypto Firms

As China has been doubling down on its crypto crackdown, Hong Kong has been working to become more of a financial hub. Part of its strategy is becoming more accommodating to crypto businesses. The region has taken steps to welcome Chinese crypto firms.

The government of Hong Kong has also stated that it would work on becoming an “international virtual asset center,” with web3 and other sectors a major focus. Another major change is the fact that banks have been asked to provide services to crypto firms in Hong Kong.

Despite the ban on crypto in China, businesses have found ways to operate. The country is currently grappling with how to handle cryptocurrencies. It may take some time before effective laws can be put into place.

Crypto Mining Still Heavily Scrutinized

China has been effective in banning crypto mining. However, there have been underground activities despite the ban. Officials have raided such locations, while North America sees a strong influx as miners migrate to other locations.

China has also fined Bitmain over tax violations, in another step to show that it is serious about the rules. Still, its metaverse industry is flourishing, with officials optimistic about its potential.