Chinese companies Ant Financial and Tencent, who own AliPay and WeChat, respectively, have taken measures to monitor cryptocurrency transactions on their popular mobile wallet platforms in light of the Chinese government’s recent crackdown on cryptocurrency-related fundraising and trading activities, one of them being a cryptocurrency gambling ring for the 2018 World Cup. The government has banned domestic exchanges, Initial Coin Offerings (ICO), and is now seeking to block foreign exchanges using the country’s Great Firewall. Even with those restrictions, however, investors could still theoretically purchase cryptocurrencies through over-the-counter methods.
Coindesk reported in late August that five high-level regulatory agencies in China, including the People’s Bank of China (PBOC) and the Banking Regulator Commission, issued a warning against any cryptocurrency-related fundraising and trading activities. Officials have also shut down a large number of WeChat groups that discussed newer cryptocurrencies.
Tencent released a statement last week highlighting the measures it will take to prevent cryptocurrency transactions on WeChat. Tencent stated in the press release that it has come up with three main measures to regulate any “problematic platforms” related to ICOs and cryptocurrencies.
Specifically, the tech giant said it will prohibit users from using WeChat payments to make any virtual currency-related transactions. Moreover, it will conduct both real-time monitoring of daily transactions and risk assessment of any suspicious transactions.
Ant Financial said in a televised interview with BJ News, a Beijing-based local news outlet, that it will also take measures to restrict or permanently ban accounts engaging in any cryptocurrency activity, depending on the situation.
“AliPay has always adhered to the principle of not providing services to virtual currency transactions,” an Ant Financial spokesperson said in the interview. “We will continue to closely monitor over-the-counter trading activities on a daily basis. Once we find any suspicious crypto-related transactions, we will take appropriate measures immediately, including but not limited to: suspension of fund transfer functionality of any AliPay account used by companies for crypto-related transactions.”
The Bottom Line
Cryptocurrencies and blockchain technology represent the latest frontier for technology, showing new possibilities regarding decentralization, immutability, and anonymity. However, with 2018 rife with events regarding cryptocurrency theft and fraud, including the notorious Coincheck heist and the Chinese World Cup cryptocurrency gambling ring. The Chinese government has taken a hardline against cryptocurrency and it seems that Tencent and Ant Financial are following suit, forbidding cryptocurrency transactions. Perhaps if transactions can be conducted in a secure manner, such a policy might be reconsidered.