i Introduction to the Legal and Regulatory Framework

China's legal and regulatory framework for virtual currencies has seen several critical developments in the past two years. These include the promulgation on 4 September 2017 of the Announcement on Preventing Token Fundraising Risks (2017 Announcement), which led to a more stringent regulatory approach towards virtual currencies; the Regulation on the Disposition of Illegal Fundraising (Consultation Draft) issued on 24 August 2017, which sought to provide a clear legal basis for sanctioning fundraising by distributing or issuing virtual currencies; and the decisions in several court cases during the period that illustrated and explored the implications of the 2017 Announcement.

Although the current regulatory landscape is now defined by the 2017 Announcement, several of the provisions of that Announcement have already been in place since 2013. On 3 December 2013, the People's Bank of China (PBOC), the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission (CSRC) and the China Insurance Regulatory Commission jointly issued the Notice on Precautions against the Risks of Bitcoins (2013 Notice).3 Its contents are described further below.

In addition to the 2017 Announcement, the regulatory framework is also informed by provisions in other more general regulations, such as laws relating to the PBOC, securities law, anti-money laundering law and criminal law. These laws help to clarify the key restrictions on virtual currencies and related fundraising activities, as well as the penalties for their infringement.

i The 2013 Notice

The 2013 Notice is important in showing the initial regulatory approach in China in relation to virtual currencies, and as a point of comparison for subsequent changes brought about with the release of the 2017 Announcement. The 2013 Notice begins by reviewing the four central features of a virtual currency:

  1. it has no central issuer;
  2. it possesses a limited total circulation amount;
  3. there is no geographic limit on the use of such commodities; and
  4. the users of such commodities can remain anonymous.

The 2013 Notice cautioned that virtual currencies are not a currency in the strict legal sense despite their name, because they are not issued by the monetary authorities and thus lack the legal status of legal tender.4

The 2013 Notice permitted some activities in virtual currencies: while prohibiting dealing in such currencies by financial and payment institutions, it did permit the operation of online trading platforms. Specifically, Article 2 provided that no financial or payment institution could:

  1. offer products or services priced in virtual currencies;
  2. buy or sell such currencies;
  3. underwrite virtual currency-related insurance; or
  4. provide clients with virtual currency-related services, including trading, clearing and settlement, or their use as deposits or pledges.

However, Article 3 allowed websites that provided trading and other services related to virtual currencies to operate, while requiring them to register with the Telecommunications Regulatory Agency. The 2013 Notice was thus not entirely restrictive: while warning citizens of the risks of virtual currencies, it allowed individuals to own and participate in the trading of such currencies, and trading platforms were permitted to continue operation.

ii The 2017 Announcement

In comparison, the 2017 Announcement introduced three key changes. First, it establishes the illegality of fundraising through distributing virtual currencies, initial coin offerings (ICOs) and other related financing activities, such as the unlawful issuance of securities. Secondly, it requires organisations and individuals to provide refunds to investors who had previously participated in such fundraising, and to make other arrangements to protect the interests of investors. Thirdly, it bans the operation of virtual currency trading platforms.

The 2017 Announcement defines token fundraising as a process where fundraisers distribute virtual currencies to investors who make financial contributions in the form of virtual currencies, such as Bitcoin and Ether.5 Article 1 provides that such fundraising is an unauthorised and illegal activity, and reiterates the position (stated in the 2013 Notice) that virtual currencies are not issued by a monetary authority, and thus lack the legal standing of legal tender. Building on this position, Article 2 imposes a ban on any organisations and individuals from virtual currency fundraising activities. All such fundraising activities must cease as of the date of the 2017 Announcement, and organisations and individuals who had previously raised money through such fundraising were required to provide refunds or make other arrangements to 'reasonably protect the rights and interests of investors'. Relevant authorities were required to investigate and penalise those who did not comply.

Article 3 effectively bans the operation of virtual currency trading platforms. Such platforms are no longer permitted to exchange fiat currencies for virtual currencies; to trade or act as central counterparties for such currencies; or to provide pricing, information or other services in relation to them. A token trading platform in violation of these rules would be subject to an order by the relevant authority to terminate its website platform and mobile application, and for the relevant commercial and industrial authority to revoke its business licence.

Article 4 reiterates the ban on bank and payment institution dealings in virtual currencies set out in 2013 by providing that such institutions may not provide services such as account opening, clearing or settlement denominated in virtual currencies. Such institutions are also not permitted to underwrite insurance associated with virtual currencies (which would presumably cover insurance proceeds to be repaid in such currencies), or to include losses related to virtual currencies in their insurance coverage. In a further tightening of the earlier restrictive position, financial and payments institutions are now required to report any suspicion of illegal fundraising involving virtual currencies to the relevant authorities.

Article 5 instructs the public to be on high alert to the associated risks from fundraising and trading related to virtual currencies, for example, risks relating to speculation; business failure (presumably, the failures of issuers and trading platform operators) and exposure to false assets. Investors are advised to undertake a thorough assessment of investment risks on their own account and to guard against fraud. Similarly, Article 6 enjoins financial organisations to contribute to systemic financial stability by observing the relevant policies, ensuring compliance by their employees and improving investor education in this area.

The key tenets of the 2017 Announcement appear to have been broadly complied with. According to a research report by the Tsinghua University National Institute of Financial Research dated 14 September 2017, Bitcoin China – one of the earliest virtual currency trading platforms in China with one of the highest trading volumes – announced that it would stop registering new users and cease all trading operations by 30 September. It was the first such platform in China to issue such an announcement. By 23 September 2017, more than 90 per cent of platforms involved in virtual currency financing and distribution in Shanghai had essentially withdrawn their operations.6

The markedly more restrictive position set out in the 2017 Announcement appears to have been prompted by the proliferation of virtual currency use and trading activity in China since the start of 2017. According to a report issued on 26 July 2017 by the NIFA, an aggregate of 2.62 billion yuan had been raised through 65 ICO programmes operated by 43 ICO platforms in the first half of 2017 alone. In contrast, before 2017, only five ICO programmes were operated in China.7 Such rapid growth appears to have caused concerns among officials, including concerns relating to the largely unregulated nature of such platforms, the ease of cross-border payments via cryptocurrencies to evade foreign exchange controls and the anonymous nature of such currencies, which make them difficult for the government to monitor.8

ii Securities and Investment Laws

The 2017 Announcement states that 'virtual currency fundraising is an illegal public activity, suspected of constituting various financial crimes such as [. . .] the illegal issuance of securities'.9 It draws a connection between fundraising via ICOs and the issuance of securities; however, it does not make entirely clear the exact nature of such illegality.

Further insight into the exact nature of such illegality may be found in other, more general legislation. The Securities Law of People's Republic of China (Securities Law) applies to the issue and trading of shares, corporate bonds and 'other securities recognised by the State Council according to law'. While there have not been any public pronouncements by the CSRC or the courts to the effect that virtual currencies would fall within the scope of the Securities Law, it is at least arguable that, in some cases, depending on the terms of the ICO and the virtual currency, such virtual currencies may fall within the scope of the Securities Law, in which case the provisions in the Securities Law relating to the public offer of securities and other related provisions would apply.

The Notice on Equity Crowdfunding Risk Rectification Implementation Plan (Notice on Equity Crowdfunding Risk), issued on 14 April 2016, provides another legal authority to establish the illegality of fundraising related to virtual currencies. The Notice on Equity Crowdfunding Risk provides that companies that conduct internet equity financing are strictly forbidden to engage in a variety of activities.10 Internet equity financing is defined in the guiding opinion, cited in the Notice on Equity Crowdfunding Risk, as 'raising small sums of equity financing from members of the public, carried out through a platform of the equity crowd financing intermediary institution (e.g., an internet website or other similar electronic media)'.11 Again, depending on the terms of the ICO and the virtual currency, certain ICOs may be seen to fall within the scope of this Notice.

The prohibited activities listed in the Notice on Equity Crowdfunding Risk include the public offering of shares without authorisation. Specifically, if a company issues shares without placing restrictions on the intended potential investors, or issues shares directed at a group of more than 200 people, it is deemed to be issuing shares to the public. Such issuance must be reported to the CSRC for prior approval. In the case of an issuance of shares of more than 200 people, such an offering may also not be distributed to the public by means of advertisements, including announcements, online or text messages, public inducements, or similar forms of mass media.12 In addition, the Notice on Equity Crowdfunding Risk also contains other provisions, for example, forbidding the illegal operation of securities businesses, such as stock underwriting, brokerage, securities investment consulting, and the provision of false and illegal advertising on financial products and businesses. Any information published by a platform and a financier:

  1. must be true and accurate;
  2. must not violate the relevant laws and regulations;
  3. may not mislead or misappropriate the project; and
  4. may not make false statements or misleading propaganda.13

To the extent that an ICO falls within the scope of this Notice, it is also possible that some of these provisions may have been breached.

iii Banking and Money Transmission

As noted in Section I, the 2017 Announcement provides that virtual currencies are not legal tender in the PRC, as they are not issued by the PBOC. This position is consistent with Article 20 of the Law of the People's Republic of China on the People's Bank of China (2003), which states that renminbi shall be issued and controlled by the PBOC (Article 18), and that no other organisation or individual may print or issue promissory notes as substitutes for the renminbi for circulation in the open market (Article 20).

Also as stated above, Article 4 of the 2017 Announcement provides that financial institutions and non-bank payment institutions may not provide services such as account opening, transaction, clearing and settlement for virtual currencies and their related financing; nor are such institutions permitted to underwrite insurance associated with virtual currencies.

Recent interviews with the PBOC provide some insight on the rationale for these restrictive positions. In an interview conducted in February 2016, Zhou Xiaochuan, then-Governor of the PBOC, stated that while any future virtual currency should aim to protect privacy, it should also seek to maintain social security and order by combating financial crimes that might otherwise be enabled or facilitated by the use of a strictly anonymous currency or currency substitute.14 Similarly, in a speech made in March 2018, Zhou also cited the risk of 'a significant negative influence on consumers', and unpredictable effects on financial stability and monetary policy transmission, as key rationales for the restrictive measures that have been adopted in the past few years. While acknowledging the potential usefulness of virtual currencies as a technological and financial innovation, Zhou suggested they needed further testing before being rolled out in scale as a medium of exchange to the general public.15

iv Anti-money Laundering

The anonymous nature of virtual currency transactions has given rise to concerns about their possible misuse for money laundering purposes and, particularly in China, capital flight in light of the strict currency controls that are in place.

Article 4 of the 2013 Notice required all branches of the PBOC to 'closely follow trends in virtual currencies and similar commodities', with the ultimate objective being to research money-laundering possibilities enabled by such currencies and to formulate effective counter-measures. Online portals that provided Bitcoin trading and related services were also required to perform their obligations against money laundering by identifying and verifying users' identities. On discovering any suspicious transactions relating to Bitcoin or other virtual currencies, banks, payment institutions and virtual currency websites are required to immediately make a report to the China Anti-Money Laundering Monitoring and Analysis Centre.

While the 2017 Announcement does not mention anti-money laundering, the highly restrictive measures – the prohibition on dealing in virtual currencies by banks and payments institutions, the banning of virtual currency fundraising and the ban on all trading activity on public exchanges – all indicate a concern that virtual currencies, given their anonymity and relatively unregulated nature, could be easily misused for anti-money laundering purposes. As explored below, anti-money laundering was also cited as a key concern in discussions between Chinese authorities and virtual currency trading platforms in early 2017, shortly before the promulgation of the 2017 Announcement.

v Regulation of Exchanges

Increasing regulation of virtual currency trading platforms began in 2017 even before the issuance of the 2017 Announcement. In January and February 2017, the Business Management Department of the PBOC, the Municipal Bureau of Finance, the Municipal Industry and Commercial Bureau, and other relevant departments of Beijing and Shanghai, held conversations with key responsible persons of such trading platforms in which they identified possible legal, policy and technical risks inherent in operating these platforms. They also imposed clear restrictions on the operators of such platforms, including not to participate in money laundering activities, and not to violate Chinese laws relating to foreign exchange management and payment settlement, or laws relating to taxation or commercial advertising.16

Shortly after, with the issuance of the 2017 Announcement, virtual currency trading platforms were banned from operating in China. Article 3, as noted earlier, states that all virtual currency trading platforms should no longer exchange any fiat currencies for virtual currencies, or act as central clearing counterparties for such virtual currencies. Following the issuance of the 2017 Announcement, senior executives of virtual currency trading platforms were reported to have been summoned for further conversations with regulators. In the course of such conversations, platform operators were ordered to immediately cease new client registration and announce the date by which their platforms would cease trading (with such date being no later than 15 September 2017), and to announce the immediate suspension of new user registration.17 As stated earlier, trading platforms in China appear to have essentially ceased their trading business since that time, some by moving their operations out of China.18

Further measures to regulate virtual currency-related activities have involved the National Internet Finance Association (NIFA), a regulatory body set up to manage internet-related financial risks. Established in December 2015 by the PBOC, and backed by the CSRC and the China Banking and Insurance Regulatory Commission (CBIRC), the NIFA is intended to provide a channel for members of the public to report and file complaints on suspicious activities relating to internet finance.19 In August 2018, the NIFA modified the reporting portal on its platform to allow for reporting on virtual currency-related activities. In particular, individuals may now submit statements to report any entities which, while engaged in an internet finance business, exchange fiat currencies for virtual currencies; exchange one virtual currency for another; or trade or act as central counterparties for trading such currencies. Also caught are services relating to virtual currencies (such as pricing and brokerage services), or the underwriting of insurance businesses involving such currencies.20

Private companies have also been urged to take steps to ensure compliance with the regulatory framework. In August 2018, Tencent removed several social media accounts on its social app WeChat on allegations that such accounts had illegally raised funds through ICOs and facilitated virtual currency transactions;21 the following month, Tencent blocked various WeChat accounts that promoted ICOs, as well as the official WeChat sales account of a large Chinese Bitcoin mining company, Bitmain.22 Baidu and Alibaba have taken similar actions, banning virtual currency-related content from their forums.23 While owners of the banned accounts remain capable of setting up new mobile applications, or apps, and may still publish content on Tencent-owned app store MyApp, press reports note that sources close to Chinese regulators say the next step of law enforcement will likely be to ban the virtual currency-related apps themselves.24 Again in August 2018, Beijing's Chaoyang district, which includes the central business area, issued a notice banning office buildings, hotels and shopping malls from hosting sales or marketing events relating to virtual currencies;25 the Guangzhou Development District, a special economic development zone in Guangzhou, announced a similar ban at around the same time.26 These measures illustrate how the scope of regulators' concerns has come to include bricks-and-mortar venues, in addition to online platforms.

To date, none of the legal authorities have banned the private trading of virtual currencies between individuals.

As for overseas exchanges, in February 2018, China was reported to be planning to block foreign websites and platforms related to virtual currency trading and ICOs in a bid to stamp out virtual currency trading within China.27 Intentions of such a block are consistent with warnings, released by the NIFA in January 2018, which stated that visiting or accessing virtual currency trading platforms registered outside China would infringe the relevant regulations (presumably a reference to the 2017 Announcement). The NIFA further warned investors to recognise the risks associated with overseas virtual currency trading platforms, including fraud and pyramid selling.28

More recent measures have clarified and strengthened the ban on virtual currency trading to include overseas platforms. In August 2018, Chinese authorities announced further measures to crack down on virtual currency trading and ICOs, including on overseas platforms involved in such activities.29 These measures included the monitoring and blocking of over 120 virtual currency trading platforms that had set up servers outside mainland China, but that were providing related services to mainland citizens. Websites and accounts on social media that provided related services, especially ICO-related fundraising support and marketing information, would also be shut down. Furthermore, third-party payment companies were banned from operating any virtual currency-related businesses.30 These measures were accompanied by another warning, issued jointly on 24 August 2018 by the CBIRC, the Office of the Central Cyberspace Affairs Commission, the PBOC and the State Administration for Market Regulation. The warning cautioned against criminal elements that operated offshore websites attracting retail investors in mainland China to invest in Ponzi schemes using buzzwords such as blockchain and virtual currency.31 A similar statement was issued by the PBOC's Shanghai Head Office on 18 September 2018, warning investors about the risks associated with ICOs and virtual currency trading.32

vi Regulation of Miners

There are currently no laws that directly prohibit the mining of virtual currency. However, the Office of the Leading Group for the Special Corrective Action of Internet Financial Risks (Office for Special Corrective Action)33 issued a document (Document on Corrective Action of Internet Financial Risks) on 2 January 2018 to direct mining companies to stop the business of mining. While this Document appears to be an internal direction or guideline from the Central Office for Special Corrective Action to its local branches, it clearly shows the regulators' attitude towards miners.

The Document on Corrective Action of Internet Financial Risks directs operators to stop the business of mining in an orderly way. The local branches of the Central Office for Special Corrective Action are required to actively coordinate the relevant local authorities, and to comprehensively implement measures, to direct the relevant miners to cease the business of mining virtual currencies. Such measures include controlling electricity prices (or in some cases electricity supply), and implementing land, tax and environmental protection policies to encourage an orderly winding down of such business. The local branches were also required to report to the Central Office for Special Corrective Action regarding their progress in arranging the winding-down of mining activities in their respective jurisdictions by early January 2018.34

Finally, in terms of enforcement in general, since the more restrictive position set out in the 2017 Announcement, domestic virtual currency trading and related activities have declined dramatically. The Office for Special Corrective Action indicated that by August 2018, it had identified 88 virtual currency trading platforms and 85 ICO platforms that have 'essentially safely withdrawn from the market',35 and similarly stringent efforts have recently been made in relation to overseas operators offering such services in China. Bitcoin-denominated trades have reportedly declined from over 90 per cent of global Bitcoin trading activity to approximately 5 per cent36 – a statistic that shows both the demand in China for virtual currency issuance and trading before the 2017 Announcement, and the effectiveness of enforcement measures since.

Notwithstanding these recent stringent measures, according to a judicial interpretation effective on 7 September, China's Supreme Court has also recently stated that digital data stored on a blockchain submitted as evidence can now be lawfully used in legal disputes in China. The judicial interpretation further stated that China's internet courts will recognise the legality of blockchain as a method for storing and authenticating digital evidence, on the condition that digital signatures, reliable timestamps and other digital data are available to prove the authenticity of such technology.37 This judicial interpretation may provide helpful clarification on the admissibility of virtual currency-related digital evidence in deciding future disputes.

vii Regulation of Issuers and Sponsors

As stated above, the 2017 Announcement has made it explicit that it is unlawful to conduct ICOs in China, and has banned issuers and sponsors from conducting related activities. However, it is not entirely clear how the Announcement will be enforced against issuers and sponsors, as it makes reference to potential breaches of other laws and regulations such as public offers of securities or illegal fundraising. Therefore, it appears that whether enforcement is possible will depend on the circumstances and whether a breach of such laws and regulations can be found. It also means that enforcement may be handled by different regulators depending on the nature of the breach.

viii Criminal and Civil Fraud and Enforcement

The Regulation on the Disposition of Illegal Fundraising (Consultation Draft) contains administrative regulations on illegal fundraising. Similar to the 2017 Announcement, Article 15 of the Regulation recognises virtual currency-related fundraising as a form of illegal fundraising.38 Where the administrative department of illegal fundraising finds that a party has raised funds without legal authorisation, and those funds have been raised by issuing virtual currencies, the administrative department is instructed to conduct an administrative investigation into illegal fundraising.39 If found in breach, any parties involved in the illegal fundraising will receive an administrative warning or fine.40 This Regulation, for now, remains a consultation draft and has not yet been promulgated formally.

In addition to the administrative penalties set out above, criminal sanctions for illegal fundraising may also apply. According to the Criminal Law, Article 176, any person who takes deposits from people illegally or in disguised form and disrupts financial order is liable to be sentenced to no more than three years in prison or criminal detention, and a fine of between 20,000 to 200,000 yuan. (Article 192 provides a similar criminal offence for raising funds by fraudulent means, and allows for longer sentences and larger fines.)

Recent cases illustrate how transactions involving virtual currencies receive very limited legal protection, following the stringent position set out in the 2013 Notice and reinforced in the 2017 Announcement. Article 52 of the Contract Law of People's Republic of China (1999), effective from 1 October 1999, provides several grounds for a contract to be voided, among them 'damaging the public interest' and 'violating the compulsory provisions of laws and administrative regulations'. Recent court judgments have shown how these grounds can be engaged by dealings in virtual currency. In doing so, these cases underscore the limited willingness of the Chinese courts to enforce contracts involving virtual currencies, and the limited protection the courts extend to investors in such currencies.

In one case in late 2017, the plaintiff, an individual, contracted with a defendant, another individual, to transfer money to the defendant in exchange for receiving certain virtual currencies. The contract in this case was ruled to be invalid because it was damaging to the public interest on the basis that the transfer of virtual currencies was not protected by law – a position held to be consistent with the 2013 Notice, which prohibited the circulation of virtual currencies as legal tender. Accordingly, the funds acquired by the defendant transferee as a result of the contract should be returned to the plaintiff transferor.41

In another case in 2018, the plaintiff, which was a Bitcoin trading platform operator, had contracted with the defendant, a company, to refund the defendant in Bitcoins in view of the pending winding-down of the plaintiff's online trading platform. (The defendant had previously entered into an agreement by which the plaintiff's website would host and operate online certain parts of the defendant's business). Though the plaintiff wanted to proceed with the contract to refund the defendant in Bitcoins, the defendant disputed the contract.

The court analysed this contract as a contract for the exchange of Bitcoins. It held that it was invalid on the basis that it violated a mandatory provision of Chinese law: the 2013 Notice, which stated that no financial or payment institutions could offer (among other services) the purchase, sale or exchange of Bitcoins. The claims of the plaintiff to implement the contract were dismissed. 42

A third case in 2018 highlighted that any losses arising from an investment in virtual currencies would not receive legal protection.43 In this case, the plaintiff (an individual) had asked the defendant (another individual) for assistance to invest a sum of renminbi in purchasing a virtual currency. The plaintiff incurred losses from this investment, following the shutdown of the virtual currency trading platform concerned, and sued the defendant to return the original invested amount, claiming that the defendant had used the funds for other purposes. The court investigated this claim and found that the defendant had in fact invested the funds into virtual currencies. More importantly, it ruled that the plaintiff could not sue for a return of his original investment, because an investment into virtual currencies was in no way protected by law.

Considered in the round, these cases underscore that while the personal freedoms of private citizens allow them to trade in virtual currencies between themselves, they should be aware that such commodities do not have legal standing as fiat currency, and that any transactions relating to them are not protected by law and may be held to be damaging to the public interest.

ix Looking ahead

Given the recency of the 2017 Announcement and the Regulation on the Disposition of Illegal Fundraising (Consultation Draft), and official statements stating concerns about the use, trading and fundraising of virtual currencies, it seems probable that the restrictive positions set out in these legal authorities are likely to remain in place for the near future.

Nonetheless, a speech in March 2018 by the PBOC Governor Zhou Xiaochuan also hinted at an interesting possible future development. In it, Zhou shared that the PBOC had been working with the financial industry on research and development to develop a virtual currency of its own. Such a virtual currency would aim to promote convenience and cost efficiency, as well as security and privacy protection in the retail payment system. Particular attention would be paid to financial stability and risk management, especially in preserving current policies relating to monetary and financial stability; in preventing substantial losses to consumers; and in ensuring that the use of virtual currencies would not detract from the principal of financial products and services serving the real economy. Regulatory developments would seek to be dynamic, Zhou stated, following relevant technological developments while also staying informed of industry and general public opinion.44

In sum, China's regulatory landscape in relation to virtual currencies seems poised to continue evolving in the coming years. Given the size of its real economy and the importance of its demand for virtual currencies, it appears a regulatory space that bears close watching.


1 References in this chapter to China are to the People's Republic of China excluding Hong Kong, Macau and Taiwan.

2 Annabella Fu is a partner at Linklaters. She thanks Weiran Yang for her assistance in the preparation of this chapter.

3 A Notice of the People's Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission on Precautions Against the Risks of Bitcoin ([2013] No. 289 of the People's Bank of China), Preamble. While the Notice refers to Bitcoin, its principles are understood to apply to all virtual currencies.

4 The 2013 Notice, Article 1.

5 Announcement on Preventing Token Fundraising Risks, Article 1.

6 Xun Shuo, Ke Yan and Wei Xingkong: Research Report on ICO Supervision in China, produced by Tsinghua University National Finance Research Institute, 30 September 2017, pp. 14–15. Available at http://www.pbcsf.tsinghua.edu.cn/Upload/file/20171026/20171026142221_1122.pdf (accessed on 4 October 2018).

7 Greg Pilarowsky and Lu Yue, 'China Bans Initial Coin Offerings and Cryptocurrency Trading Platforms', posted on China Regulation Watch, 21 September 2017. Available at http://www.pillarlegalpc.com/en/news/wp-content/uploads/2017/09/PL-China-Regulation-Watch-Cryptocurrency-2017-09-22.pdf (accessed on 4 October 2018).

8 'Why Chinese Regulators Shut Down Bitcoin Exchange', posted at Bitcoin.com. Available at https://news.bitcoin.com/expert-reasons-chinese-regulators-shut-down-bitcoin-exchanges/ (accessed on 4 October 2018).

9 The 2017 Announcement, Article 1.

10 Notice on Equity Crowdfunding Risk Rectification Implementation Plan ([2016] No. 29 of the CSRC), 14 April 2016, Section II.ii).

11 Guiding Opinions of the People's Bank of China, the Ministry of Industry and Information Technology, the Ministry of Public Security, et al., on Promoting the Sound Development of Internet Finance ([2015] No. 221 of the People's Bank of China), Section II(9).

12 The Notice on Equity Crowdfunding Risk, Section II.ii), Paragraph 1.

13 The Notice on Equity Crowdfunding Risk, Section II.ii), Paragraph 1.

14 Interview with the Governor of the People's Bank of China for Caixin, 13 February 2016. Available at http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/3016856/index.html (accessed on 4 October 2018).

15 PBOC Governor Zhou Xiaochuan and Two Deputy Governors Answered Press Questions on Financial Reform and Development, 22 March 2018. Available at http://www.pbc.gov.cn/english/130721/3504272/index.html (accessed on 4 October 2018).

16 The Business Management Department of the People's Bank of China Continues Conversations with Bitcoin Trading Platforms in Beijing, 9 February 2017. Available at http://beijing.pbc.gov.cn/beijing/132005/3248926/index.html (accessed on 4 October 2018). The Shanghai Headquarters of the People's Bank and the Shanghai Financial Office Unit Other Relevant Regulatory Departments to Meet the Key Responsible Persons of the Bitcoin Trading Platforms, 6 January 2017. Available at http://shanghai.pbc.gov.cn/fzhshanghai/113571/3230012/index.html (accessed on 4 October 2018).

17 'Bitcoin Exchanges Must Make Risk-Free Withdrawal Plans and Close by September', Caixin, 15 September 2017. Available at http://finance.caixin.com/2017-09-15/101145796.html (accessed on 4 October 2018).

18 'China to stamp out cryptocurrency trading completely with ban on foreign platforms', South China Morning Post, 5 February 2018. Available at https://www.scmp.com/business/banking-finance/article/2132009/china-stamp-out-cryptocurrency-trading-completely-ban (accessed on 4 October 2018).

19 'The National Internet Association of China – About NIFA'. Available at http://www.nifa.org.cn/nifaen/2955866/2955892/index.html  (accessed on 4 October 2018).

20 'China Crypto Crackdown Continues By Opening Up Illegal ICO Token Sales Reporting Option', BitcoinExchangeGuide, 29 August 2018. Available at https://bitcoinexchangeguide.com/china-crypto-crackdown-continues-by-opening-up-illegal-ico-token-sales-reporting-option/ (accessed on 4 October 2018). The NIFA portal may be found at this address: https://jubao.nifa.org.cn/ipnifa/index.html. ICO-related activities were added to the scope of possible activities to be reported in August 2018, as reflected at this address: https://jubao.nifa.org.cn/ipnifa/range.html (accessed on 4 October 2018).

21 'Tencent Suspends ICO Wechat Accounts as Beijing Clamps Down on Crypto Activities', 22 August 2018. Available at https://www.yicaiglobal.com/news/tencent-suspends-ico-wechat-accounts-beijing-clamps-down-crypto-activities (accessed on 4 October 2018).

22 'WeChat now censoring Bitmain and Crypto Price Prediction Accounts', 10 September 2018. Available at https://www.coindesk.com/wechat-now-censoring-bitmain-and-crypto-price-prediction-accounts/ (accessed on 4 October 2018).

23 'China Crypto Crackdown Continues By Opening Up Illegal ICO Token Sales Reporting Option', BitcoinExchangeGuide, 29 August 2018. Available at https://bitcoinexchangeguide.com/china-crypto-crackdown-continues-by-opening-up-illegal-ico-token-sales-reporting-option/ (accessed on 4 October 2018).

24 'Blockchain News Accounts booted from WeChat', 22 August 2018. Available at https://www.caixinglobal.com/2018-08-22/blockchain-news-accounts-booted-from-wechat-101317720.html (accessed on 4 October 2018).

25 Notice on Banning the Host of Virtual Currency Promotion Activities, 17 August 2018, cited in 'Chaoyang district of Beijing bans virtual currency promotion activities', 22 August 2018. Available at https://baijiahao.baidu.com/s?id=1609486096836702563 (accessed on 4 October 2018).

26 'Guangzhou development district bans cryptocurrency events', 29 August 2018. Available at http://www.globaltimes.cn/content/1117579.shtml (accessed on 4 October 2018).

27 'China to stamp out cryptocurrency trading completely with ban on foreign platforms', South China Morning Post, 5 February 2018.

28 Warnings on Preventing the Risks of Disguised ICO Activities, 12 January 2018. Available at http://www.nifa.org.cn/nifa/2955704/2955770/2970213/index.html (accessed on 4 October 2018). Warnings on Preventing the Trading Risks of Overseas ICO and Virtual Currencies, 26 January 2018. Available at http://www.nifa.org.cn/nifa/2955704/2955770/2970365/index.html (accessed on 4 October 2018).

29 Resolute crack-down on curbing virtual currency transactions and ICO financing, 23 August 2018. Available at http://news.cnstock.com/news,yw-201808-4262742.htm (accessed on 4 October 2018).

30 Ibid.

31 Warning on Precautions Against the Illegal Fundraising Risks Under the Name of 'Virtual Currency' or 'Blockchain', 24 August 2018. Available at http://www.cbrc.gov.cn/chinese/newShouDoc/02DD1CADB1AC45DF948E3AD36F93BEDD.html (accessed on 4 October 2018).

32 Continuing the Prevention of Risks Associated with ICOs and Virtual Currency Trading, 18 September 2018. Available at http://shanghai.pbc.gov.cn/fzhshanghai/113571/3629984/index.html (accessed on 4 October 2018).

33 The Office for Special Corrective Action is established according to Section IV(1) and IV(2) of the Notice of the General Office of the State Council on Issuing the Implementation Plan for Special Rectification on Risks in Internet Finance (No. 21 [2016] of the General Office of the State Council), issued on 12 April 2016. That document provides that the leading Office for Special Corrective Action is led by a responsible person appointed from the PBOC with the participation of the responsible persons from other relevant departments. Local leading groups are led by persons in charge of finance in the government at each provincial level.

34 'Forbidding Payment Channels, Inspections on Mining, the People's Bank of China Seriously Regulates Virtual Currencies', Sina, 19 January 2018. Available at http://finance.sina.com.cn/money/forex/bitcoin/2018-01-19/doc-ifyquixe4637164.shtml (accessed on 4 October 2018).

35 See footnote 30.

36 See footnote 30.

37 Provisions of the Supreme People's Court on Several Issues in the Trial of Internet Court Cases, effective on 7 September 2018, Article 11(2).

38 Regulation on the Disposition of Illegal Fundraising by the Legislative Affairs Office of the State Council (Consultative Draft), 24 August 2017, Article 15.

39 Regulation on the Disposition of Illegal Fundraising by the Legislative Affairs Office of the State Council (Consultative Draft), Article 15. (Article 5(2) states that the administrative department of illegal fundraising in each county shall be specified by the local government at the county level or above.)

40 Regulation on the Disposition of Illegal Fundraising by the Legislative Affairs Office of the State Council (Consultative Draft), Articles 28–34.

41 Huang Jian v. Liu Li, concerning a sales contract dispute, (2017) Chuan 1011 Minchu 2958), 21 November 2017.

42 Central Asia Intelligent Digital Technology (Shenzhen) Co Ltd v. Changsha Shengda Industrial Co Ltd, concerning a dispute on the validity of a contract, (2017) Xiang 0105 Minchu 6277), 9 January 2018.

43 Chen Yinxia v. Guo Shaoying, concerning a contract dispute (2018) Yeie 0604 Minchu 1641), 25 April 2018.

44 PBOC Governor Zhou Xiaochuan and Two Deputy Governors Answered Press Questions on Financial Reform and Development, 22 March 2018. Available at http://www.pbc.gov.cn/english/130721/3504272/index.html (accessed on 4 October 2018).