Louis Lehot | China Bans All Crypto Transactions

China declared all cryptocurrency transactions in the country illegal Friday, marking its harshest crackdown yet on the burgeoning industry.

Ten government entities on Friday called for an end to transactions using “virtual currency,” defined as assets that exist in digital form and are issued by non-monetary authorities. Virtual currencies use encryption technology and various forms of distributed technology such as blockchain, the statement said, specifically citing the two largest cryptocurrencies, bitcoin and ether.

The agencies said the rise of virtual currencies was “disrupting economic and financial order” by supporting illegal activities such as gambling, money laundering and illegal fundraising, according to a translation of the statement.

The statement emphasized that businesses related to virtual currencies, including those that provide pricing services, are illegal, and that Chinese residents should not use overseas cryptocurrency exchanges.

The government entities behind the statement included China’s central bank, The People’s Bank of China; the Securities Regulatory Commission; and the General Administration of Market Supervision. The memo, dated Sept. 15, was posted on the central bank’s website Friday.

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Louis Lehot is a partner and business lawyer with Foley & Lardner LLP, based in the firm’s Silicon Valley office. Follow on Twitter @lehotlouis

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Louis Lehot

Louis Lehot

Louis Lehot is a partner and business lawyer with Foley & Lardner LLP, based in the firm’s Silicon Valley office. Follow on Twitter @lehotlouis

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