Alipay Bans Bitcoin OTC Trading, Warns Users Against "False Propaganda"

Alipay Bans Bitcoin OTC Trading, Warns Users Against "False Propaganda"

Omar Faridi
  • Alipay, the largest payment processor in China, has reportedly banned accounts engaging in over-the-counter (OTC) bitcoin trading.
  • The fintech firm will also install an inspection system on its payment platform to detect and prevent any suspected OTC cryptocurrency trading. 

Alipay, a Chinese mobile and online payments platform, has reportedly banned accounts that were found engaging in over-the-counter (OTC) bitcoin trading.

According to an August 24 report from local media outlet Beijing News, the Hangzhou-based payment processor will be closely monitoring accounts suspected of OTC cryptocurrency trading.

Alipay’s management team has also decided to install an inspection system on the company’s web-based and mobile app software to track crypto-related activity. Notably, Chinese authorities have launched a nationwide crackdown on local digital currency exchanges last year and banned initial coin offerings (ICOs).

"Resolutely" Suspend OTC Bitcoin Trading

After the government’s ban, investors in China still continued to buy, sell, and trade cryptocurrencies through peer-to-peer (P2P) trading platforms. However, it appears the government’s crackdown on crypto has significantly reduced Chinese Yuan (CNY) to Bitcoin (BTC) trades, as it currently accounts for less than 1% of global cryptocurrency trading.

Ant Financial Services Group, which owns and operates Alipay, has said that “virtual currency trading” poses serious risks to investors, which is the main reason why it doesn’t provide or support crypto exchange services. Moreover, the report from Beijing News stated that the Alibaba Group affiliate firm plans to “resolutely” suspend accounts involved in digital currency-related transactions.

Warning Against "False Propaganda"

Ant Financial also noted that in order to enhance consumer protection, it will provide a “risk prevention education” guide to its customers. Per the world’s highest valued fintech company, it aims to

“remind users not to be deceived by various false propaganda, to recognize the risks of virtual currency transactions, and to avoid the possible losses suffered.”

Alipay

Despite Chinese authorities and large companies attempting to ban crypto-related activity, the country’s National Fintech Risk Rectification office recently reported there are still 124 cryptocurrency exchanges currently accessible to local traders.

These trading platforms are linked to IP addresses owned by companies operating abroad, or outside of mainland China, according to Shanghai Securities Times. China’s Risk Rectification office has said that it will be closely monitoring the online activities of its citizens, while also blocking internet access to these crypto exchanges.

Nationwide Internet Censorship

Notably, the People’s Republic of China is well-known for its internet censorship as it has created the Great Firewall of China. This restrictive nationwide firewall attempts to prevent access to foreign news and social media outlets such as Google, Facebook, and Twitter.

However, the nation’s citizens and expats working in China have found ways to bypass the restrictive firewall by accessing the internet through virtual private networks (VPN). There are a number of such services used by people and businesses operating in China, including Express VPN and NordVPN.