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Chinese Blockchain Firms Heavily Regulated In China

Chinese Blockchain Firms Heavily Regulated In China
Breaking News / Blockchain

The internet censorship agency in China has recently approved a set of regulation for blockchain service providers in the country which will begin to come into effect by the middle of February.

The Nations Cyberspace Administration (CAC) published the newly “Regulation for Managing Blockchain Information Services” on Thursday by defining blockchain information service providers as “entities or nodes” which offer information services to the public using blockchain technology through desktop sites or mobile apps. By 15th February the rules will become official.

As reported by CoinDesk, the document has more than 20 articles listed but there is only one that requires blockchain service providers to register with the CAC within 10 business days of the start to offer services to the public.

Names, server addresses, service types and industry fields must be registered by the blockchain startup. In addition, startups are banned from using blockchain technology to “produce, duplicate, publish and disseminate” content that isn’t allowed by Chinese law.

With the rules set in place, if the blockchain companies do not comply then the CAC said that they would initially issue a warning and that failure to act within the specified timeline would result in a fine which could leave 30,000 yuan worse off. The range of the fine, however, depends on the severity of the offence.

The Administration first posted the draft rules back in October last year. During this time, one of the articles also recommended that blockchain startups operating in fields such as news published, education, reporting and the pharmaceutical industry which must also gain licenses from the relevant bodies before registration with the CAC. The newly dropped article lists the final draft of the rules.

Prior to this, the technology in blockchain had been used to bypass “Great Firewall” which is the nickname given to China’s strict internet censorship. A good example is the #MeToo movement which occurs on social media and as a part of this movement, and the recent scandal regarding pharmaceuticals in the nation, the people took to the Ethereum blockchain to publish information and therefore avoid the strict censorship regulations put in place in China.

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