Blockchain has had a hard time in China recently: a swift crackdown and closure of almost all initial coin offering (ICO) platforms followed by a similarly sudden action against bitcoin exchanges. Not only were ICO platforms mandated to refund all purchases, the operators of bitcoin exchanges were also “requested” to remain in China. So, where does this leave bitcoin and blockchain in China?

Before we panic, we need to remember China’s MO when it comes to innovation: a watchful but laissez-faire attitude until it gets big enough to cause problems. Bike rentals, group buying, online entertainment, e-commerce, courier services, ride-hailing, food delivery and many more have all been through this. In most cases, the inevitable crackdown was a net positive for consumers and the public at large: streets aren’t littered with bikes (or at least not as much), consumers don’t have to worry about buying fraudulent or fake goods, services, or products, and riders can ride (fairly) safely in a private car knowing that they won’t get in trouble with the law.

The Chinese government, above all else, wants to make sure they can effectively control domestic events while also proving to the governed that it has their best interests in mind. Before we talk about bitcoin and ICOs, here’s a general framework I use in guessing how severe a crackdown might be:

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