China steps up crackdown on cryptocurrency, calling all related activities illegal

China’s top regulators stepped up a crackdown on cryptocurrency with a blanket ban on all crypto-related trading and mining activities.

Ten government departments including the Peopler’s Bank of China (PBOC) as well as banking, securities and foreign exchange regulators pledged to work together to clean up “illegal” cryptocurrency activity, according to a statement released by the central bank on Friday.

The PBOC said services offering trading, order matching, token issuance and derivatives for cryptocurrencies are strictly prohibited and overseas crypto exchanges providing services in mainland China are also illegal.

“Overseas cryptocurrency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity,” the PBOC said. Workers at foreign crypto exchanges will be investigated, it added.

The PBOC said it has also improved its systems to step up monitoring of crypto-related transactions and root out speculative investing.

“Financial institutions and nonbank payment institutions cannot offer services to activities and operations related to virtual currencies,” the central bank said.

The Chinese government will “resolutely clamp down on virtual currency speculation, and related financial activities and misbehavior in order to safeguard people’s properties and maintain economic, financial and social order”, the PBOC said.

China’s crypto crackdown comes as Beijing is looking to fulfill its climate targets. The country is the world’s biggest carbon emitter and has set out to become carbon neutral by 2060.

Bitcoin and other cryptocurrencies are mined by high-powered computers competing to solve complex mathematical puzzles in an energy-intensive process that often relies on fossil fuels, particularly coal.

The National Development and Reform Commission (NDRC), the top economic planner, said that it will work to cut off financial support and electricity supply for mining. Such activities contribute little to China’s economic growth, spawn risks, and hamper carbon neutrality goals, it said.

It’s not the first time China has gotten tough on cryptocurrencies. Earlier this year, Chinese regulators tightened restrictions and banned financial institutions and payment companies from providing services related to cryptocurrency.

The repeated ban highlight the challenge of closing loopholes and identifying bitcoin-related transactions, though banks and payment firms say they will support the efforts.

There is some resurgence in cryptocurrency-related activities recently which are bringing disruptions to the financial order and the regulators will resolutely eliminated the illegal activities, said the central bank.

Industry insiders say that Chinese investors were now trading on platforms owned by Chinese exchanges that had relocated overseas, including Huobi and OKEx. Meanwhile, China’s over-the-counter market for cryptocurrencies has become busy again, while once-dormant trading chartrooms on social media have revived.