The Cyberspace Administration of China (CAC) has introduced new regulations for blockchain firms that are operating in the country. The announcement was published on the regulator’s website on Thursday, Jan. 10.
According to the CAC, the guidelines, which will come into force on Feb. 15, were developed to contribute to the healthy development of the industry.
The document describes the firms that are subject to regulations as websites or mobile apps that provide information and technical support to the public using blockchain technologies. As soon as the regulations come into power, they will be obliged to register their names, domains and server addresses at the CAC within 20 days.
The guidelines require blockchain startups to allow authorities access to stored data, and to introduce registry procedures that would require ID card or mobile numbers from its users. Moreover, they will be obliged to oversee content and censor information that is prohibited under current Chinese law.
If a firm fails to comply with the regulations, it might face fines from 20,000 to 30,000 yuans ($2,900 and $4,400, respectively). In case of serial offences, the company might face a criminal investigation.
China first released draft guidelines in October for blockchain companies, which also contained recommendations that sought to eliminate anonymity in blockchain.
At the time, Asian newspaper The South China Morning Post wrote about an anonymous open letter that alleged sexual harassment at a top Chinese university that was published on the Ethereum (ETH) blockchain in April. The media outlet believes the publication of the letter could be a motivation behind the new regulations.
China is currently mainly piloting blockchain legislation in three regions — Beijing, Shanghai and Guangzhou. According to a December report by local finance publication Securities Daily, there are 11 blockchain-related policy projects concentrated in these areas.
In the meantime, the country has upheld a de facto ban on domestic crypto trading since 2017, which was completed in February 2018 when the government added international crypto exchanges and initial coin offering (ICO) websites to its Great Firewall. The decision was approved by the People’s Bank of China, the country’s central bank, and regulators.