The Chinese State Administration of Foreign Exchange has introduced new regulations that require banks to identify and report high-risk transactions, specifically those associated with cryptocurrencies.
This development is expected to pose significant challenges for mainland investors looking to trade Bitcoin and other digital assets, as reported by the South China Morning Post.
Under the new guidelines, local banks are obligated to monitor transactions that are deemed risky in terms of foreign exchange trading. This includes activities involving underground banks, cross-border gambling, and illicit financial transactions related to cryptocurrencies.
Banks are required to assess the risk level of these activities based on factors such as the identities of those involved, the source of funds, and the frequency of trading.
They are also mandated to implement risk management measures and restrict certain services for flagged individuals or entities. Legal practitioner Liu Zhengyao, who works at ZhiHeng Law Firm in Shanghai, commented on the impact of these new regulations.
