3,000 Fake Blockchain” Platforms in China

China to Coordinate Against ”3,000 Fake Blockchain” Platforms

This week China’s central television (CCTV 2) reported the Peoples Bank of China (PBOC), its Ministry of Public Security, in coordination with other regulatory agencies, will work to combat cybercrime often in the disguise of financial innovation.

2,000 Tokens, 3,000 Knockoff Platforms

The People’s Bank of China, the Supreme People’s Procuratorate, the Supreme People’s Court, the Ministry of Public Security (MPS), the Ministry of Industry and Information Technology (The Five Departments) will join hands to combat internet financial fraud, according to CCTV 2.

PBOC is the mainland’s central bank, and currently is the largest bank of its kind in terms of asset holdings. The MPS is its national police force, comprising nearly 2 million officers. Financial innovation in China has come with a cost: darknet crime has grown more sophisticated too, from traditional phone fraud to more advanced financial crime.

Li Xuyang, head of security and anti-fraud at Tencent AI Lab, noted that blockchain has become a trendy tool in financial fraud.

Recently, a growing number of projects would use the popular concept of blockchain to generate a new token, or a virtual currency. We have spotted over 2,000 forms of tokens with an active user base and 3,000 odd knockoff platforms promoting fake blockchain products.

The Five Departments emphasized that regulatory authorities shall cooperate with companies to fight against emerging financial crimes and boost a shared community of cybersecurity.

Vice president of the Ministry of Public Security Shi Jun said that they will initiate a special campaign to curb all sorts of internet fraud.

The phrase “special campaign” has prompted rumors that the Ministry of Public Security might arrest some influential figures in the industry as a warning to others. “The cryptocurrency industry is filled with speculation and scams,” said a public figure with over 1 million followers on social media platform Weibo. “I believe this time the government will definitely arrest some conmen in the industry.”

China's Special Campaign: Central Bank, Law Enforcement Coordinate Against Cybercrime

At the time of writing, and perhaps unconnected, Bixin Wallet informed users that they will suspend over-the-counter trading services on January 17 because of “regulatory uncertainties”.