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China Crypto Ban: Here’s Five Critical Things You Should Know

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People’s Bank of China (PBOC) issued fresh guidelines to eliminate all forms of crypto use in mainland China. The Chinese Central Bank deemed all crypto-related transactions illegal and ordered authorities to take strict action against existing crypto mining farms in the country. It also prohibited any foreign crypto exchanges from offering services in the country.

The fresh nationwide crypto ban has led to a sharp decline in cryptocurrency prices including Bitcoin ($BTC), Ethereum ($ETH), and several others.  While the crypto enthusiasts were not really shocked by the move given China has banned Bitcoin and other crypto assets on a number of occasions in the past. However, market insiders believe the latest set of guidelines are different from previous similar crackdowns as it came from the national bank itself.

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Let’s look at five critical points in the newly released crypto crackdown guidelines that are different than any other previous crackdowns,

1. Classify Crypto Mining as Eliminated Industries:

The current set of crypto crackdown guidelines deems crypto mining as an eliminated industry, which would lead to surplus electricity charges for crypto mining operations. China had put crypto mining under the “elimination category” back in 2019 as well but was removed soon after.

2. First Clear Mention of Bitcoin, Ethereum, and Tether

The latest regulatory guidelines notably mention Bitcoin, Ethereum, and USDT for the first time. Earlier, crypto-assets were collectively referred to as virtual assets.  the Deputy Governor of the People’s Bank of China Fan Yifei took special exception to the stablecoin use claiming it could lead to failure of the existing monetary system.

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3. First Centralized Crypto Ban Order

Prior to the latest crypto crackdown guidelines from the central bank, most of the early crackdown activities were carried out by state and provincial authorities. Despite a centralized oversight, no other previous regulatory action was directly issued by the central ban beyond cautionary warnings. This time around the Supreme Court, the Supreme Procuratorate, the Ministry of Public Security, and the Administration of Foreign Exchange have come together to ensure a complete ban on crypto-related activities.

4. Domestic Companies to be Held Responsible For Aiding Foreign Entities

The current set of guidelines also put great risks for the local business and technology solution providers who would be held accountable if found dealing with companies associated with crypto trading. The official document read,

“the provision of services by overseas virtual currency exchanges to domestic residents of my country via the Internet is also illegal financial activity. For the domestic staff of relevant overseas virtual currency exchanges, as well as those who know or should know that they are engaged in virtual currency-related business, they are still illegal financial activities. Legal persons, unincorporated organizations and natural persons that provide services such as marketing promotion, payment, and settlement, and technical support shall be held accountable in accordance with the law.”

5. Government Won’t Protect People Incurring Losses Due to Crypto

The guidelines made it clear that there are no “ifs & Buts” around the legality of cryptocurrencies. Any person involved in crypto trading activities violating a public order won’t qualify for any civil legal actions. It means the government won’t come to the rescue of the citizen.

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The real nature of the latest crypto crackdown can be determined by how crypto exchange giants such as Huobi, OKEx, and Binance react to the latest regulatory guidelines since the majority of Chinese traders make use of these exchanges.

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Jerome Powell’s reappointment, a setback for cryptocurrency – Mike Novogratz

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  • Novogratz says Powell second term is setback for crypto.
  • Galaxy Investment Partners CEO says Powell does not understand US economy.
  • Novogratz predict bullish future for crypto with institutional investors.

Ex-hedge fund manager and CEO Galaxy Investment Partners, Mike Novogratz, has frowned at the reappointment of Jerome Powell as chairman Federal Reserve.

Novogratz is of the opinion that a second tenure for Jerome Powell would slow down cryptocurrency markets, the Nasdaq, and “all assets.” He said this as a Bitcoiner and not an investor noting that Powell could be detrimental to the markets’ growth.

He said during a CNBC interview that, in his opinion, Powell has failed to understand the political and economic reality of the United States, which reflects on the market.

Novogratz explains realities of US economy

The CEO said cryptoers are getting bearish on Jerome Powell’s appointment following the change in the Marco story.

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He noted that inflations are high in bad ways in the US, questioning what the fed would do.

“We have inflation showing up, you know, in pretty bad ways in the US So, we can see, is the Fed going to have to move a little faster … That would slow all assets down. It would slow the Nasdaq down. It would slow crypto down if we have to start raising rates much faster than we thought.

He noted that the US is experiencing its highest inflation in 30 years. At 6.2 percent annually, the consequences are already starting to ripple through the rest of the world, with 39 of the 46 world’s largest economies showing higher inflation year-on-year.

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According to Novogratz, with Powell being tipped for a second term, he can be more aggressive with his policies without needing to measure his actions so as not to put his job at risk.

Jerome Powell aside, Novogratz focused on cryptocurrency

The CEO hinted that he is all about the crypto space predicting a bullish future for the currency in the near future.

As CEO of Galaxy Digital, he has to study market trends and expectations constantly. He assures that the more distant future looks promising for cryptocurrencies after the short-term ups and downs.

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He also states that more and more institutional investors continue to enter the crypto space a catalyst for growth in the crypto space.

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Jerome Powell Could Slow Down The Cryptocurrency Industry, Mike Novogratz Says

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Mike Novogratz believes that Jerome Powell’s policies could slow down the cryptocurrency markets, the Nasdaq and “all assets”

Mike Novogratz is not happy with U.S. President Joe Biden’s decision to pick Jerome Powell to chair the Fed for a second term. And he’s speaking not as a Bitcoiner but as an overall investor: He believes Powell could be detrimental to the markets’ growth.

In an interview for CNBC this week, Novogratz hinted that from his point of view, Jerome Powell had failed to understand the political and economic reality of the United States and that the markets have a similar view, being pessimistic about his tenure.

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Careful With Jerome Powell

Speaking about the cryptocurrency market, Mike Novogratz said that “people are getting pretty bearish” on crypto after Jerom Powell’s appointment, especially following the changes in the “macro story.”

“We have inflation showing up, you know, in pretty bad ways in the U.S. So, we can see, is the Fed going to have to move a little faster … That would slow all assets down. It would slow the Nasdaq down. It would slow crypto down if we have to start raising rates much faster than we thought.

The United States is experiencing its highest inflation in 30 years. At 6.2% annually, the consequences are already starting to ripple through the rest of the world, with 39 of the 46 world’s largest economies showing higher inflation year-on-year.

Mike Novogratz argues that now that Powell has the confidence of a new mandate, he can be more aggressive with his policies without needing to measure his actions so as not to put his job at risk. And Jerome Powell’s thinking so far seems to favor an expansionary monetary policy.

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Mike Novogratz Remains Focused on the Cryptocurrency Industry

However, Mike Novogratz is a cryptocurrency lover and doesn’t plan to stop being one. As CEO of Galaxy Digital, he has to constantly study market trends and expectations. He assures that the more distant future looks promising for cryptocurrencies after the short-term ups and downs.

The crypto ecosystem is growing, and more and more institutional investors are entering the game, spurring the industry’s growth.

“The amount of institutions Galaxy sees moving into this space is staggering. I was on the phone with one of the biggest sovereign wealth funds in the world today, and they’ve made the decision on a go-forward basis to start putting money into crypto. I’ve had the same conversations with big pension funds in the United States.”

Novogratz always argued —especially in 2017 and 2018— that institutional investors would play a major role in the rise of the cryptocurrency industry and that Bitcoin could easily reach $100K soon.

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Last month, Novogratz warned that the end of the NFT rush could be approaching and advised investors to take profit and bet on Bitcoin or Ethereum.

As Cryptopotato reported on October 8, Novogratz explained that many NFTs trade for large sums of money primarily because of the emotionality of those involved and expectations – not because of proper fundamentals:

“That’s not normal, in any way, shape, or form … It seems to me like a pretty good time to at least book some profits, and fold it back into Bitcoin or Ethereum or another token.”

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Finnish regulators tighten the screw on digital currency marketing

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Hot on the heels of the rising cryptocurrency hype, Finnish regulators have dropped a formal notice. On Wednesday, the Finnish Financial Supervisory Authority (FSA) stated:

“Only registered virtual currency providers can market virtual currencies and related services in Finland. The marketing of virtual currencies in Finnish and in Finland is only allowed for entities registered as virtual currency providers in Finland.”

Finland is a highly economically free country, ranking 17th in the Index for Economic Freedom. However, as LocalBitcoins CEO Sebastian Sonntag told Cointelegraph upon receiving the company’s FSA license in 2019:

“The controls in the financial sector are of particularly high quality, and the position of the clients is well protected.”

It appears that the FSA is keen to protect investors — particularly retail — who are more likely to be influenced by marketing activities. If the 2020–2021 bull run’s meme mania is anything to go by, there will be more retail FOMO across the globe.

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The FSA press release is a direct response to the rise in marketing of digital currencies and related services across Finland. Finnish media observed increasing traffic for cryptocurrency articles, while in a recent editorial by mainstream outlet the Helsinki Times, writers concluded that crypto is trendy in Finland and will hold its popularity for years to come.

Elsewhere in Finland, local crypto adoption is brewing. Finnish esports company Elisa Esports announced a partnership with cryptocurrency firm Coinmotion to bolster the Nordic esports scene. 

However, the list of Supervised Entities operating in the cryptocurrency and digital currency space is still small. Fewer than 10 companies are registered, so the recent notice may be a nod toward future regulation and the evolving regulatory landscape.

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Crucially, the FSA cannot advise on Finnish customers visiting foreign websites. Nor does the recent initiative affect advertising on international websites not explicitly targeted at Finnish citizens.

As a result, while regulators get to grips with the local market, Finnish crypto advocates can continue to visit international crypto websites.

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