- Less than a month after China started clamping down on Bitcoin mining, the government warns its citizens of crypto trading risks.
- Chinese state-run media agencies cited rampant market manipulation as the primary reason not to get involved in digital asset trading.
- However, Xinhua and China Central Television stated that Bitcoin trading is not illegal.
After cryptocurrencies suffered a market-wide crash following reports of the heightened Chinese crackdown on Bitcoin, the government has published a new series of reports, admitting that digital asset trading may not necessarily be against the law.
Citizens have the freedom to trade Bitcoin at their own risk
In late May, China barred financial institutions and payment companies from providing services related to crypto transactions and warned investors not to trade the new asset class.
Although it would not be the first time the Chinese government attempted to clamp down on the digital currency market, Beijing has gone one step further with a crackdown on Bitcoin mining.
It is essential to note that China is the world’s largest cryptocurrency mining location, accounting for over 65% of the Bitcoin hash rate. Despite a strict ban on digital currencies, Beijing had turned a blind eye towards crypto mining farms in the country’s northern regions.
Companies with mining operations in China have been gradually pulling out of the country, including Huobi and BTC.TOP.
The country’s government continued to publish series of reports recently, criticizing the cryptocurrency markets. State-owned media, including Xinhua News Agency and the China Central Television, told the audience about “rampant market manipulation” while citing anecdotal examples to discourage citizens from trading crypto.
The state-backed press agency encourages the public to stay away from the risk and volatile crypto markets to protect their capital.
However, the government mouthpiece clearly admits that China does not consider crypto trading to be illegal. Xinhua writes:
If only virtual currencies such as Bitcoin are bought and sold as virtual commodities, ordinary people have the freedom to participate in transactions at their own risk.
Xinhua added that it would continue to expose projects and platforms that attract retail investors by marketing cryptocurrencies as speculative investments that could allow people to get rich quickly.
China Central Television further warned the public how easy it is to create a digital token out of thin air. The two state-run news agencies hope to educate unaware retail investors of the possible scams that exist in the cryptocurrency market.
Following the recent crackdown on crypto mining operations, to date, China’s attitude towards the digital currency market remains convoluted.
