Hainan issued a notice: Enterprises are not allowed to illegally engage in ICO and virtual currency trading (attached with the full text of the notice)

Wu Blockchain learned that after Hainan issued the "Notice on Printing and Distributing Several Policy Measures to Accelerate the Development of Blockchain Industry in Hainan Province" on May 9, the Hainan Department of Industry and Information Technology issued another urgent document on May 15, entitled "Notice of the Hainan Provincial Department of Industry and Information Technology on Strictly Carrying out Blockchain-Related Business in Accordance with the Law", "taking a step forward and taking a step back", dispelling the "fantasies" of many people in the currency circle.

The notice obtained by Wu Blockchain pointed out that all relevant companies must conduct blockchain-related businesses in strict accordance with laws and regulations, and must strictly abide by the "Announcement on Preventing the Risks of Token Issuance and Financing" issued by the People's Bank of China, the Central Cyberspace Affairs Commission, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission. They must not illegally engage in token issuance and financing activities, or engage in the exchange of legal currency and tokens or "virtual currency", or buy or sell tokens or "virtual currency" or act as a central counterparty to buy or sell tokens or "virtual currency", or provide pricing, information intermediary and other services for tokens or "virtual currency".

Among them, it is not allowed to buy or sell tokens or "virtual currencies" or act as a central counterparty to buy or sell tokens or "virtual currencies", and it is not allowed to provide pricing, information intermediary and other services for tokens or "virtual currencies". These two terms are very new. The former may refer to some tob market makers and service providers, and the latter may refer to some current media and platform institutions. At present, it is impossible to determine whether this new term comes from Beijing or Hainan's own research, but the former seems more likely.

In addition, the notice requires all Internet industrial parks, Internet innovation and entrepreneurship bases, and Internet crowd-making spaces in the province to further strengthen their awareness and capabilities of risk identification and risk prevention and control, and to strengthen the review of target companies' businesses when attracting investment to ensure that they introduce companies that operate legally and in compliance with regulations; they should actively guide settled companies to strengthen self-discipline, standardize industry behavior, and create a good development atmosphere; they should firmly support companies that conduct business within the framework of relevant national laws and regulations, and promptly report any illegal and irregular behavior and cooperate with relevant departments to resolutely crack down on it.

Previously, the "Notice on Issuing Several Policy Measures to Accelerate the Development of the Blockchain Industry in Hainan Province" pointed out that

Support leading enterprises to explore the construction of digital asset trading platforms, explore standards and technical models in digitalization, digital asset rights protection, global flow of digital assets, and digital asset trading, and promote the pilot of digital asset-related businesses in Hainan. "Explore the "blockchain + financial sandbox regulatory mechanism. Financial enterprises can carry out blockchain innovative products, services, business models and transmission mechanism tests in the sandbox after approval."

The document was issued urgently on the 15th, which shows that the relevant departments in Hainan may have been under certain pressure, and it also dispelled the fantasy of people in the cryptocurrency circle. In fact, China's financial regulation has always been relatively conservative. If there is no clear plan at the central level, it is unlikely that local governments will take the lead.

In addition to the lack of compliance progress in trading platforms and coin issuance, the biggest problem is that the boundaries of "virtual currency" are not clear enough. For example, are points based on blockchain and freely tradable considered virtual currency? Are tokens for digital asset securitization considered virtual currency? These two are also the things Hainan hopes to promote in its previous documents. If the attitude is too conservative, then the possibility of promoting these two items is unlikely.

Wu said that the compliance management and supervision of cryptocurrency is an international trend, and regulators also need to update their concepts and promote it in a practical way, rather than just killing it. As the People's Daily commented on the 18th: How to achieve a dynamic balance between combating crimes, maintaining financial security, protecting consumer rights and embracing appropriate technological innovation and financial innovation requires prudent decision-making by legislators and regulators in various countries.