WeChat Threaten the Liquidity of the OTC Crypto Market in China

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BY MARKO VIDRIH: On May 7, the popular WeChat messenger in China updated its own payment transaction policies to include provisions that could limit the possibility of over-the-counter (OTC) trading in a country where the official circulation of cryptocurrencies was banned. 

According to Primitive foundation partner Dowey Wan, account holders for trading activities are prohibited from conducting activity related to the release of tokens and raising funds with their help, as well as trading in cryptocurrencies. For violation of the existing rules, the owners of such accounts may face a blockage.

“Given most OTC transactions are happening in wechat, this may impact local liquidity to quite some extent,” wrote Wan on Twitter.

In particular, the accounts of well-known over-the-counter sites and users interacting with them are at risk. While the scale of the possible prosecution of participants in OTC trading is unknown, one of the methods of circumventing the restrictions is called registration of new accounts.

In August last year, cryptocurrency media accounts got blocked in WeChat because of their violation of the requirements for “public information distribution services in instant messaging tools”.

In September, the official sales channel miners Bitmain was locked, which was, according to the messenger, disseminated information, which required licensing.

Featured image via WeChat