In recent days, regulation targeting cryptocurrency activities has been in a mode of constant barrage. In the wake of numerous authorities, including the banking regulatory commission, issuing their warnings about various cryptocurrency and blockchain activities, a slew of other related departments is now following suit.
What has experts worried is that more and more raising of red flags will, ultimately, lead to tighter and more suffocating regulation that could kill the industry. Head of the Internet Finance Professional Forum, Chen Yunfeng confirmed these fears, saying that the red flags show that the authorities believe the industry to be riddled with scammers and shysters, and until this perception can be changed, the dark clouds of strangling regulation will continue to loom overhead.
Equally worrying is that those entering the anti-crypto/blockchain “camp” aren’t just small provincial cities or small-town luddite protectionists, but the major technological, financial, socio-political hubs like Beijing and Shenzhen. They are starting to see blockchain and cryptocurrency as a malign influence; an evil standard being carried by those who would see the public’s rights and well-being undermined. It’s most unfortunate that they don’t see these activities for what they are — a corruption of the blockchain concept to illegal ends.
Abuse of Blockchain Technology
According to Securities Daily, warnings issued by Shenzhen’s Internet financial watchdog claimed that “cryptocurrency is the easy tool of the criminal, and these activities (ICOs) are full of the hallmarks of illegality.” The dread and terror were palpable, as the mission of these authorities in Beijing, Shenzhen and now Hainan, too, is to adequately remind investors of the “minefield” that cryptocurrency and blockchain represents.
The misuse of blockchain technology has created this new atmosphere of trepidation. It is as Chen Yunfeng said; as long as the industry continues to be dogged by those who abuse the technology to illegal ends, the risk of greater regulation grows. Chen sees the new wave of scaremongering as having two sides. The first is the increasing number of scandals and investor nightmare stories that have emerged, which act as the smoking gun the authorities need to justify greater scrutiny. Second is that the authorities have come to learn the “tricks of the trade” thanks to clear details made public of cases that show how cryptocurrency and blockchain have been exploited to dubious ends.
To some, the greater scrutiny and cracking down isn’t exactly hot of the press. On August 21st, a number of prominent official WeChat accounts related to the crypto and Blockchain worlds were blocked after they sent information about upcoming ICOs. Some of these attempted to circumvent the blocking by opening new accounts; a sign perhaps that the industry isn’t going to take regulation lying down.