digital currency Photo: VCG

The People's Court of Beijing Chaoyang district said recently that in September this year, the People's Bank of China (PBC), the country's central bank, together with the city's financial supervision authority, blocked and took down a number of virtual currency trading websites and apps including OKEx, and shut down over 20 businesses suspected of engaging in virtual currency trading. 

The authorities' action against virtual currencies originated from a "Bitcoin" entrustment contract dispute heard by the court in Chaoyang in March 2022. The court found that a website and mobile application called "OKEx" could be registered and traded in the Chinese mainland.

In order to help regulate virtual currency production and trading activities, the court provided relevant clues found in the case to the PBC, and sent judicial advice to clean up the virtual currency trading platforms, suggesting that the operation of the website and mobile apps involved in the case be investigated and prohibited from continuing to engage in Bitcoin and other related virtual currency trading activities within the Chinese mainland.

While further mapping other virtual currency trading platform websites and mobile apps, the court checked on the situation of financial institutions and payment institutions providing top-up services for virtual currency trading platforms, strictly prohibiting related institutions from providing financial services such as currency exchange for virtual currency trading activities.

According to Caixin.com, OKEx, formerly known as Okcoin, is the world's top-ranked digital coin trading platform in terms of trading volume and number of countries served, providing trading and investment in hundreds of digital currencies including Bitcoin and Litecoin.

On September 13, 2022, the PBC said that it had coordinated with relevant departments to block the websites and apps, including a total of 10 virtual currency exchange app download addresses, one virtual currency trading app and 32 related domain names.

The central bank has established a regular monitoring mechanism for virtual currencies, closely monitoring websites and apps involving virtual currencies. In addition, it has worked with local financial supervisory bureaus to identify more than 20 enterprises suspected of engaging in virtual currency transactions, and has ordered them to shut down their businesses.

The PBC will continue to join hands with related departments to take comprehensive measures including monitoring, cracking down and cutting off payment channels to actively prevent and properly address problems related to speculation in virtual currency trading.

In September 2021, the PBC, the Office of the Central Cyberspace Affairs Commission and the Supreme People's Court jointly issued a notice saying that virtual currency-related businesses are illegal financial activities, and that overseas virtual currency exchanges providing services to residents in China through the internet are also illegal.

Later, major digital currency trading platforms like Huobi Global and OKEx issued statements halting new user registrations in the Chinese mainland and announcing the cessation of all transactions for stock users by the end of 2021.