China Unleashes New Crypto Crackdown After Discovering Sneaky Hobbitses Still Trading

Everyone needs an exchange.

We’ve said that over and over in the face of the crypto crowd’s contention that governments cannot truly stamp out trading in digital currencies.

Obviously, people who really want to find a way to obtain cryptocurrencies in exchange for dollars, euros, etc. will be able to so, but the vast majority of those fueling the speculative bubble simply won’t bother with it in the event governments decide to close the exchanges or worse, make convertibility into traditional currencies outright illegal.

That latter proposition may seem far-fetched in light of the recent launch of Bitcoin futures in the U.S. and the ongoing speculation about Wall Street wading into cryptocurrency market making, but we are just one crypto-related destabilizing financial event and/or one crypto-financed major terrorist attack away from DM governments going full-Xi with something draconian on the regulatory front.

Last week, we got still more evidence that China’s ongoing effort to do away with what the Party recently called a “tricked up bubble” is far from exhausted when the Wall Street Journal confirmed reports that Beijing is cracking down on miners. The timing there left something to be desired as it came amid an increasingly aggressive posture on exchanges from authorities in South Korea.

Fortunately (for the crypto crowd), Seoul softened its stance over the weekend, as the government said it will decide whether to pursue a bill to shutter cryptocurrency exchanges only after “sufficient discussions and opinion coordination across government offices”.That’s a far cry from conducting police raids.In the meantime, the country will implement a “real-name system” on cryptocurrency accounts and regulators did reiterate that they’ll take “firm measures” on illegal trading such as tax evasion and money laundering.

Ok, well on Monday Bloomberg is out reporting that China has been seeing some signs that “sneaky, wicked, trixie Hobbitses” are circumventing the country’s ban on exchanges. Specifically, people are using “alternative venues” and as you can imagine, Beijing isn’t particularly enamored with the idea that people are effectively ignoring their decree.