The companies utilizing blockchain technology in China will now have to adhere to new regulations published by the Cyberspace Administration of China (CAC) on January 10. The CAC report titled ‘Blockchain Information Service Management Regulations,’ will allow authorities access to data and identify users.
Zhuang Rongwen, Director of CAC, stated in the report that –
“The Regulations on the Management of Blockchain Information Services has been reviewed and approved by the Office of the Internet Information Office of the State Council and is hereby promulgated and will be implemented as of February 15, 2019.”
Rongwen had been appointed by the Chinese government, as a new head of the Cyberspace Administration of China (CAC), in August 2018. According to CAC’s report, it will implement new regulations for blockchain platforms from next month.
The blockchain based companies should develop the responsibility for information content security management, and establish and improve management systems.
According to the report, if the blockchain based companies develop new products, new applications or new functions on the line, they have to report to the government bodies. The companies have to adhere to the regulations which fall directly under the Central Government (China), for safety evaluation as per regulations.
The report further stated that the blockchain based firms should take measures such as restriction, warning, and account closure for customers who violate laws.
The firms should take appropriate measures on time to prevent the leakage of information, keep relevant records, and report to relevant authorities.
If the blockchain companies violate any of the regulations, they will be issued a warning by the Chinese governing bodies. The companies will be issued a notice by CAC to rectify corrections within a time limit, and the associated business will be suspended before the correction.
If the companies refuse to rectify the errors; conditions might be severe, they will be fined 5,000 yuan. If the companies are involved in the crime, they will be fined above 30,000 yuan and they will be investigated according to law.
In December 2018, China had imposed blockchain policy for three main cities, namely Beijing, Shanghai, and Guangzhou. The cryptocurrency trading is banned in China owing to the regulations implemented by the government. The citizens of China can possess cryptocurrency but cannot trade or exchange for fiat money as it is considered illegal.
China also wants strict regulations implemented on the blockchain based companies, as there is an increased number of crimes and fraudulent activities involved with cryptocurrency investors. The Chinese government is more concerned with the country’s economic stability on the international front, as it hopes to increase dominance in trade and foreign exchange.
With China imposing strict regulations for blockchain based companies put a break on fraudulent activities? Share your thoughts in the comments.