The People’s Bank of China (PBOC) has begun blacklisting the accounts of large OTC cryptocurrency traders as part of its anti-money laundering program.
According to WuBlockchain, China’s Central Bank has launched a campaign against money laundering through cryptocurrencies. The initiative to blacklist linked accounts is part of a broader anti-money laundering effort in China.
Earlier this year, the NBK launched a campaign to eradicate illicit proceeds and requested account information and transaction details from banks in the country to prevent illegal money circulation, including crypto assets.
The biggest threat under the NBK’s new strategy is Chinese OTC cryptocurrency traders who transact millions of dollars worth of cryptoassets outside the public market.
According to the publication, some over-the-counter cryptocurrency accounts have been blacklisted by the NBK, which prevents their holders from using bank-issued cards for the next three years, or conducting online transactions for the next five years. These rules apply to all blacklisted accounts and are not limited to cryptocurrency accounts.
After the bank’s risk system has marked and restricted transactions from a specific account, it reports this account to the regional branch of the NBK. This will ensure that information on blacklisted accounts and their owners is shared with all Chinese banks, preventing OTC dealers from opening new accounts elsewhere.
The NBK’s new strategy could cause many cryptocurrency OTC traders to stop working. However, the blacklist does not apply to legitimate cryptocurrency transactions.
“Normal cryptocurrency transactions are not considered illegal, and only those related to illegal proceeds and illegal assets will be frozen,” according to a report from the Huobi exchange.
However, the lack of uniform rules for all banks could mean that OTC trading in cryptoassets will be blacklisted regardless of its legitimacy. China does not have specific laws on cryptocurrencies, therefore, transactions with them may face the restrictions of individual banks.
As a reminder, this summer the police began freezing the accounts of Chinese OTC traders over suspicions that they are using crypto assets for money laundering and other illegal activities. In addition, reports emerged in July that Chinese police had detained Zhao Dong and other OTC traders to aid investigations, but RenrenBit denied reports of Zhao Dong’s arrest.
