China to Implement Regulations to Control The Blockchain

The Cyberspace Administration of China (CAC) is planning to implement regulations in order to control the Blockchain. As per an extensive document, Chinese blockchain companies are now required to censor content and allow authorities access to stored data and check the identity of users. The new law will come into being in February 2019 and the authorities claim that it is to “advance the industry’s healthy and orderly development.”

“The Regulations on the Management of Blockchain Information Services has been reviewed and approved by the Office of the Internet Information Office of the State Council and is hereby promulgated and will be implemented as of February 15, 2019,” the CAC director said in a statement.

The law allows the State Internet Information Office responsible for blockchain regulations at a national level. They also have state or province-specific officers who will oversee the regulations in respective areas.

The Chinese government has been notorious for implementing strict internet censorship policies controlling its citizens from fully expressing opinions and sharing content. But, as the blockchain technology was adapted more widely Chinese Internet users had found a way to overcome Beijing’s censorship. This had been a revolution as far as internet rights were concerned. But it seems that the authorities are not going to let this loose for long. Blockchain platforms are now required to verify users based on their national ID and phone number. Companies are also required to record and log user activity and maintain backups of these records for a minimum period of six months. The data recorded have to be handed over to the authorities when demanded.

The new rule effectively ensures that users won’t be able to engage in “illegal” activities using blockchain services. “Blockchain information service providers and users shall not use blockchain information services to engage in activities prohibited by laws and administrative regulations that endanger national security, disrupt social order, and infringe on the legitimate rights and interests of others” reads a part of the document.

Blockchain platforms are asked to register with the authorities through the Blockchain Information Service Management System. After filing, authorities shall evaluate the credentials and enter the company into records within twenty days if satisfactory. The companies will be given a ‘record number’ which they are then required to publicly display all the time.

Blockchain companies will have to maintain correspondence with authorities through the blockchain service portal and provide any information if requested. They are also required to inform the authorities of any users who may be in violations of these regulations. Authorities will also be conducting regular inspections to ensure the implementation of these regulations. Service Providers found to be in breach of the stipulated rules will be suspended until the issue is sorted. There are penalties ranging from fines of 5,000 yuan to the possibility of criminal prosecution.

David Cox

David is a finance graduate and crypto enthusiast. He projects his expertise in subjects like crypto and Blockchain while writing for CryptoNewsZ. Being from Finance background, he efficiently writes Price Analysis. Apart from writing, he actively nurtures hobbies like sports and movies.

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