Chinese Internet Regulator Shuts Down Accounts Illegally Touting Crypto Trading

The Cyberspace Administration of China, the national internet regulator and censor, has shut down more than a dozen social media accounts that were spreading false information on stock and crypto markets.

The agency said Saturday that some of the targeted accounts touted illegal stock recommendations and hyped crypto trading.

According to a report by Baidu, several accounts on Weibo with names such as “Huo Ge Chats About Cryptocurrency”, and “Arn – On Coins,” promoted any hyped crypto transactions.

“[They] induced netizens to participate in virtual currency transactions by posting group chat information and profit screenshots,” the report read. Further, some websites – PKEX, WEEX, and HTX – offered app download services for trading in international crypto platforms.

The accounts were found in popular Chinese social media platforms, including Weibo, Douyin, RedNote and WeChat. The fake accounts and websites involved in crypto promotions have been closed, the watchdog noted.

The Cyberspace Administration has collaborated with financial regulators to carry out the crackdown operation.

“The public should invest wisely, stay alert to risks, avoid spreading rumours, and steer clear of illegal financial activities,” the regulator said.

With China’s ban on crypto trading and mining, many Chinese citizens have been on the lookout for offshore exchanges. Some of them have been routing transactions through VPNs or international platforms.

To meet the demand, fraudsters have been using false claims to lure victims into scams involving fake promotions, and phishing.

The People’s Bank of China Digital Currency Research Institute warned users in April over claims circulating online about the launch of a “Digital Yuan Bank.”

Various platforms have spread false information alleging new pilot programs in cities like Shanghai.

According to the Securities Times investigation, scammers have used these claims to solicit personal and financial data from the public. They promised cashback returns of up to 5%, creating chat rooms and hosting in-person events to convince individuals to convert digital yuan using unauthorised channels.

Further, blockchain security firm SAFEIS reported that money involved in crypto-related crimes in China surged 10-fold to 430.7 billion yuan ($59 billion) in 2023.

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