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WeChat Threatens to Ban Chinese Accounts Trading Digital Assets

Popular instant messaging platform WeChat has warned Chinese users against using the app to process transactions involving digital assets. This warning is in line with the directive issued by the Chinese Government last May. The directive banned financial institutions from providing crypto-related services, and warned investors against speculative crypto trading. 

Therefore, WeChat, China’s largest social media platform, declared that it would limit or ban accounts that trade crypto or NFTs. Recently, it updated its rules to state what transaction behaviors would infringe on its warning. These behaviors include token issuance financing and exchange transactions involving virtual-to-virtual or virtual-to-real currency.

The updated rules now consider “engaging in virtual currency or digital collection business” as content violation.  It also classifies the act as “Illegal business operations.” 

WeChat Keeps Clamping Down on Crypto Users

Being China’s largest social media platform with over 1.1 billion active users, Tencent’s WeChat has always aligned itself with the government’s anti-crypto policies. In May 2018, the platform suspended Xiao Xieyi, a third-party blockchain app that would allow WeChat users to initiate contract agreements. 

Three months later, WeChat would block several crypto and blockchain-related accounts. These accounts reportedly published ICOs and created hype around crypto trading. According to a WeChat official, these actions violated WeChat’s terms on “Interim Provisions on the Development of Public Information Services for Instant Messaging Tools,” which were only introduced by the Cyber Administration of China a fortnight earlier. 

In March this year, WeChat also suspended over 12 public accounts that published NFT-related content. As a result, the suspended accounts were subsequently missing in search results. According to the platform, public accounts can still display and support the initial sale of NFTs. However, these accounts must provide proof of cooperation with a blockchain company certified by the Cyberspace Administration of China. Furthermore, while the initial sale of digital collectibles is permissible on the platform, WeChat prohibits public accounts from speculating on or reselling NFTs.

Bitcoin Miners in China Swim Against the Tide

Despite the crypto ban last year, Bitcoin miners in China are still successfully competing in the Bitcoin mining scene globally. Recent data from Cambridge Bitcoin Electricity Index revealed that China ranks second in Bitcoin’s total hash rate as Bitcoin miners in the country control 21.1% of the blockchain’s hash power. 

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Prior to the ban, China’s Bitcoin mining dominance was almost 50% as of May 2021. Following the decree, those figures dropped to 9.4% two months later. However, recent developments and data suggest that China’s Bitcoin miners are striving to remain in the crypto scene.

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