China’s ambition of cracking down on illegal activities involving cryptocurrency has reinvigorated as crypto-related illegal activities in the country go rampant again alongside the increasing speculation.

Following Shanghai’s move to investigate local cryptocurrency marketplace, China’s technology capital Shenzhen also issued a warning against illegal activities involving cryptocurrency and has launched an investigation into local enterprises.

According to local news outlet Shenzhen News, Shenzhen law enforcement has already identified 39 enterprises suspected of conducting illegal crypto activities, while the list has not yet been made public.

The notice released on Nov. 21 by Shenzhen’s Leading Group for Remediation of Internet Finance Risks (a local financial regulator) states that the illegal activities associated with cryptocurrencies and financial risks have been greatly reduced since the country banned local exchanges and initial coin offerings (ICOs) in 2017.

However, the recent blockchain endorsement from the country’s central government has reinvigorated speculation and illegal activities over cryptocurrencies. Under such a context, Shenzhen, the country’s tech hub, decides to take action against the rampant scams.

As per the notice, regulators are targeting companies that facilitate cryptocurrency trade in the country, companies that issue cryptocurrencies in the name of blockchain application and thus raise funds or cryptocurrencies such as Bitcoin and Ethereum, and those that provide promotion, brokerage and other services for ICOs and cryptocurrency trading platforms that are registered out of the country.

The regulators’ intention is to crack down on scam coins and fraudulent companies in the name of blockchain, which is, in fact, good for the blockchain/crypto industry. However, crypto exchanges who might provide marketplaces for these scam coins are bearing the brunt of the regulatory pressure and first targeted, since it is the most effective way to shut down liquidity/grab suspects all at once.

Earlier this week, the country’s financial hub Shanghai has taken the lead in cracking down on such illegal crypto marketplaces, which has put many second-tier crypto exchanges based there under investigation. While big exchanges like OKEx, Huobi and Gate.io remain unscathed for their ties and interest with local governments.

The crackdown is also interpreted by many as part of the preparation for the country’s central bank digital currency DCEP which is coming out soon. As previously reported by 8btc, China is likely to pilot its digital currency first in Shenzhen.