New Regulations in China For Blockchain Service Providers

With the beginning of the new year 2019, current updates are also on the rise for one of the most happening technologies named “Blockchain Tech” and related segments.

Last year, in 2018 after the final ban on cryptocurrency related operations in China by the country’s central bank, and regulators “People’s Bank of China” the policymakers, practitioners, and government agencies have been seen involved in taking constructive steps for the nation’s safety.

Recently, The Cyberspace Administration of China (CAC) has announced through a public document about the new set of approved regulations which will be applicable from February 15, 2019, for the blockchain information service providers to “safeguard national security, social public interests, and protection of legitimate rights while promoting healthy development of blockchain technology and related services.” Reportedly, the document released on January 10, 2019, by Director Zhuang Rongwen.

The document says “The Regulations on the Management of Blockchain Information Services has been reviewed and approved by the Office of the Internet Information Office of the State Council” means “the State Internet Information Office which comes under the Central Government.”

China’s internet censorship agency jotted down points through 24 article nos. to strengthen the blockchain industry by bringing self-discipline through regular inspections and establishing industry standards while guiding the blockchain information services providers on the wrong procedures which the article no. 2 describes “entity or node- that provides the blockchain information service through websites, apps, or any kind of related technical support to the public, and the organization.” For the adherence of law the agency is asking them to abide by all the important steps which come under the supervision in order to create a healthy ecosystem and to bring development to the industry.

Further, in the article nos. 7 & 8 it is also mentioned that the rules are also meant for the blockchain information service users and they have to sign “service agreements”. The agency commands both the parties “to comply with legal provisions and platform conventions. The users have required to full fill all the mandates “for real identity authentication.” The blockchain information service providers are instructed not to provide related services if the users are failed to submit the prerequisites.

The document also reads in the article no. 11 which is pointing on the registration formalities like providing the information of domain and server address which blockchain service providers have to fill “within 10 working days” and submit to “National Internet Information Office” in order to kick off their services to the public. Similarly, if the service providers decide to “terminate” the services, it is obligatory to undergo the “cancellation” procedure “30 days before the termination of the service” and organize all the important work and commitment which had made at the time of offering services.

According to the mentioned rules by CAC in article nos. 21 & 22, if the blockchain service providers are failed to furnish all the instructions related to the work the authority would bar the companies from “using” or “engaging” in blockchain technology to “Copy, publish, and disseminate information content prohibited” by rules & directorial guidelines.

The blockchain service providers have to accept the fine if they are unable to abide the regulations after the prescribed time limitation as a sign of warning declared by the CAC, failing which would enforce the conditional penalty extending from 5,000 yuan ($737) to 30,000 yuan ($4,422), in line with linking of the offense.