PBoC draws up blacklist of OTC cryptocurrency traders

The People’s Bank of China has drawn up a blacklist of accounts belonging to major traders on local cryptocurrency OTC platforms. Those named will be barred from online banking for five years, according to DeCrypt, which cites local media.

The initiative forms part of a broader drive to curb money-laundering in the country. Earlier this year the regulator launched a campaign to root out illicit gains and asked banks for information on accounts and transaction details related to the purchase and sale of cryptocurrencies.

The PBoC is placing heightened scrutiny on OTC traders. Being listed means a ban on the use of all of the user’s accounts, not limited to those linked to cryptocurrencies.

Once the bank’s risk-management system flags and limits transactions from a given account, the information is passed to a regional branch of the PBoC. This ensures that an OTC trader will not open new accounts elsewhere, as Chinese banks will be guided by the blacklist.

Local media suggest that the regulator’s new step could push OTC traders to scale back their operations.

“Transactions that are not linked to illicit assets and ‘dirty’ funds will not be subject to blocking, and their participants will not end up on the blacklist,” journalists clarified, citing Huobi’s OTC platform.

According to reports, the lack of a single interpretation of the rules among banks could lead to a decision to cease servicing accounts linked to OTC cryptocurrency trading, regardless of the legality of the transactions. China has no statutory framework governing cryptocurrencies.

In July, reports emerged that Chinese police were detaining RenrenBit founder Zhao Dong, the founder of the peer-to-peer cryptocurrency-lending platform RenrenBit, on suspicion of concealing criminal proceeds. The company later denied the allegations.

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