Regulators in China have imposed a blanket ban on all cryptocurrency transactions and mining, including bitcoin and other major coins.
Earlier this year, China banned financial institutions and payment companies from providing services related to cryptocurrency transactions. However this recent ban is much wider as it bans all cryptocurrency related activity and involves a collaborative effort of ten different agencies to crack down on what the government views as illegal cryptocurrency activity.
The People’s Bank of China (PBOC) stated that cryptocurrencies must not circulate, and overseas exchanges are barred from providing services to China-based investors.
China’s National Development and Reform Commission also stated that it will cut off financial support and electricity supply for crypto mining activities.
The ban has caused the price of Bitcoin and other cryptocurrencies to drop substantially. The ban has also hit cryptocurrency and blockchain related shares. In May of this year, for example, Bitcoin dropped 30% in one day when the ban on financial institutions and payment companies was imposed. This recent ban is more comprehensive.
In Canada, cryptocurrencies are treated as commodities and are regulated generally through securities laws and the Income Tax Act.
If you have cryptocurrency or income tax related questions contact a lawyer or financial professional who specialises in crypto law.