Wechat, an important application in China is used daily to share news, information, chat and even make an order at a restaurant. Wechat communicates with the Chinese government in order to monitor the public’s opinions on the Wechat platform to comply with the local law.
Media surrounding blockchain technology has increased with the price of Bitcoin in 2017. At the beginning of 2018, the media increase continued and new outlets started up in China. During March of this year, more than 10 new blockchain media outlets finished financing campaigns. However, this increase in media development has created some controversy. Many cryptocurrency investors criticized the increase as being a proxy and working with the dealer to “cut the leek”, a vivid way to describe the pump and dump by the dealers or the project launchers to make the profits.
On August 21, 2018 Chinese Cryptocurrency Media including Jinses Finance, Deepchain Finance, Huobi information were blocked. Wechat announced that their reason for being blocked was due to “customers”. Complaints were reviewed and processed as violating the Interim Provisions on the Administration of the Development of Public Services for Instant Messaging Tools.
Economic Observer, an independent Chinese weekly newspaper that publishes news related to economic, political and social developments commented that the companies who were blocked besides Wechat are actually “multi-platform operations”. The application Jinse Finance, for example, is still in operation while Wechat is still banned. Jinse Finance created an article after Wechat’s public account was banned called “A small increase of BTC after falling below $6,300” along with other articles via the application in Wechat.
Sa Xiao, a director of the Chinese Banking Law Research Association commented on the situation stating that it is “an expected thing” when made comments to Economic Observer. Sa Xiao believes that starting in May, we-media related to circle (a digital currency market) may have promoted an IFO (Initial Fork Offering). These IFO’s are similar to that of an ICO (Initial Coin Offering) and are suspected to be illegal fundraising campaigns targeted towards public investors. Speculative coins are becoming a hot-button issue and the “black mouth” of cryptocurrency markets are playing an important role. The increase in unstable projects has caused an abundance of coins in the market hurting normal people’s property rights.
Sa Xiao finally stated that, “from the perspective of protecting financial consumers, these ‘financial derivatives’ with the ‘currency’ as a scorpion must be disposed of. More people are taking risks out of the mentality of ‘getting rich overnight’, affecting their own and the basic life of the family.”
Last September 4, 2017, Chinese government banned the ICO in its territory. One year after, the ICO is still developing in China but making its legal presence overseas. Banning the cryptocurrency outlets in one of the most influential social platform may be a strong signal by Chinese government towards the ICO, and cryptocurrency.
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