Jan 26, 2018 07:55 PM

Quick Take: Over-the-Counter Trading of Cryptocurrencies Violates Rules: NIFA

Photo: VCG
Photo: VCG

China appears determined to stamp out cryptocurrency trading, with the latest salvo coming from the National Internet Finance Association (NIFA), a self-regulatory body set up by the People’s Bank of China and other financial watchdogs.

The group issued a warning (link in Chinese) on Friday that over-the-counter trading does not comply with existing rules and emphasized to investors the risks associated with overseas trading and fundraising through cryptocurrencies.

“Domestically, some companies or individuals are still organizing over-the-counter trading or trading between cryptocurrencies, providing services as market makers or guarantors,” the association said in a statement on its website. “This is essentially [facilitating] a cryptocurrency trading venue, and is clearly not compliant with current regulations.”

Social media platforms and nonbank payment providers that have offered services that facilitate cryptocurrency trading face “regulatory risk,” the statement said, without elaborating.

The NIFA said that the task of cleaning up the domestic market has been “basically completed” since the government banned initial coin offerings (ICOs) and cryptocurrency exchanges last year. Internet and telecom regulatory departments have shut down websites and removed the mobile apps of ICO platforms that violate the regulations.

The crackdown has pushed some investors to shift their sights overseas, the NIFA noted. But the lack of regulation in overseas markets makes these investments risky and vulnerable to hidden dangers such as market manipulation and money laundering, it said, calling on investors to clearly recognize the risks of investing via overseas platforms.

Contact reporter Liu Xiao (

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