On 21st August night, a large number of Wechat channels related to blockchain were blocked, including Jinse Finance, Huobi International, DPRating, and Token Club. When attempting to open the channel, users can see warnings roughly translated to:” due to user complaints and platform checks, the accounts are against ‘Temporary Regulations On Informational Service Development And Administration Of Instant Communication Tools’. Hence, the accounts have been blocked and prevented from further usage.”
Most of the channels blocked are highly influential. Tencent, the operator of WeChat, said in a separate statement that it chose to block these accounts permanently because they are “suspected of publishing information related to ICOs and speculations on cryptocurrency trading”. The writer has also checked other influential media channels on Wechat, many of them have articles blocked instead of being closed down altogether. The blocked articles are mainly related to ICO analysis or recommendations.
“Temporary Regulations On Informational Service Development And Administration Of Instant Communication Tools” (referred to below as “The Regulation”) can be found on this website. (http://www.cac.gov.cn/2014-08/07/c_1111983456.htm?from=timeline&isappinstalled=0) It does not have specific reference to blockchain or cryptocurrency, and is extremely vague about what it is trying to regulate, besides mentioning to require open accounts/channels being checked and regulated. Nonetheless, it is clear that The Regulation was targeted at Wechat, the most influential instant communication app in China. The Regulation was published on 7th August, roughly two weeks ago from the time of the Wechat ban.
The Regulation was from the National Internet Information Office. The writer notes that the Internet Information Office has just changed a new head on 2nd August (https://www.zaobao.com.sg/special/report/politic/cnpol/story20180802-879952). Its new head, Zhuang Rongwen, used to be the vice head of the Central Propaganda Agency. Before coming to Beijing, he had extensive bureaucratic life in Fujian Province, serving under the then Fujian Province chief, and now Chairman Xi Jinping. Furthermore, he was also promoted fast during Xi’s administration in Fujin.
Just during the time of writing of this article, on 22nd August, Beijing Chaoyang District, an area where a huge number of cryptocurrency projects and investment funds are based, announced that it bans all shopping malls, hotels restaurants, and offices from hosting cryptocurrency-related marketing activities. The exact wording of the ban is shown below. The date of the ban was dated on 17th August.
It is hard not to link these events together.
2nd August: Zhuang Rongwen, an ex-colleague of Chairman Xi, was appointed the head of the National Informational Office.
7th August: The National Informational Office published The Regulation.
17th August: Beijing Chaoyang District finalized a ban against all cryptocurrency marketing events in hotels, restaurants, offices, and shopping malls.
21st August: WeChat blocked a large number of influential blockchain channels.
22nd August: Beijing Chaoyang District announced the ban to the public.
Despite the previous rounds of crackdown and bans in 2017, crypto and blockchain markets are still popular in China. Whether this means another round of crack down by the Chinese government is still unclear. Notably, Chaoyang District has only banned cryptocurrency marketing events, but not blockchain-related events. The writer is optimistic about the fact that the Chinese government will leave space for the blockchain technology to flourish. However, at the same time, the Chinese government is also highly cautious of potential financial frauds as well as capital control problems associated with the cryptocurrency markets.