China Introduces New Regulation for Blockchain Startups

China has introduced new regulations for blockchain firms that are operating in the country. According to the CAC (Cyberspace Administration of China), the guidelines will be implemented and come into effect on Feb. 15, Source: http://www.cac.gov.cn

The regulations put into effect are to promote the healthy development of blockchain technology and safeguard national security and social public interests. These regulations apply to individuals or organizations who provide blockchain information service to the public or provide technical support to the blockchain information service.

As soon as the regulations come into effect, they are obliged to register their names, domains, provide identity card numbers and server addresses at the CAC within 10 working days from the date of providing the service.

Upon receiving the registration information and if approved (like certified), the records will be maintained in the ‘filing system’ and will be publicly accessible.

The guidelines also state that blockchain startup or service providers should,

• Serve only those users (or customers) who have performed real identify authentication.
• Keep the record (such as ID, mobile nos) of the users using their blockchain services and maintain this data for at least 6 months.
• Take extra measures such as warning, restriction, and account closure for users that violate laws, service agreements, or engaged in illegal behavior(like spreading fake news reports).
• Have technical abilities for user’s information protection and have emergency response capabilities as per national standards in case of any breach or spreading of illicit content by a user.

These measures will help in protecting the legitimate rights, interests of citizens, and reduce fraud. To ensure said guidelines are followed, authorities will be conducting periodic audits on the information maintained by the blockchain startups or service providers.

If an individual or organization found not to comply with the regulations, it might face fines from 5,000 to 30,000 yuan ($2,900 and $4,400, respectively). In the case of serial offenses, the organization or individual might face a criminal investigation.

“Rules to Promote Healthy Development of Blockchain Industry” Or “Toughened Rules For Blockchain Service Providers”. In our opinion: To protect investors interest