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1/ Back in October, China’s “Internet regulator” put out draft regulatory guidelines for “"Blockchain information service and providers”.
As of this week, those guidelines are formalized and will take effect beginning February 15th.
(Source: cac.gov.cn/2019-01/10/c_1…)
As of this week, those guidelines are formalized and will take effect beginning February 15th.
(Source: cac.gov.cn/2019-01/10/c_1…)
2/ Definitions:
+ "Blockchain information services" are those who provide information service to the general public via their apps/ web services that are based on blockchain technology.
+ "Blockchain information services" are those who provide information service to the general public via their apps/ web services that are based on blockchain technology.
2a/ Definitions:
+ "Blockchain information services providers" refer to those organizations or companies who provide support to blockchain tech companies or the general public. Some think that this is broad enough to cover foreign subsidiary or even foundations.
+ "Blockchain information services providers" refer to those organizations or companies who provide support to blockchain tech companies or the general public. Some think that this is broad enough to cover foreign subsidiary or even foundations.
2b/
+ "Blockchain information service users" refer to an organization or an individual. The big question here: can this be construed to also include community members of a token project?
+ "Blockchain information service users" refer to an organization or an individual. The big question here: can this be construed to also include community members of a token project?
3/ China will be regulating crypto companies via its ICP registration process, which is its way of regulating most internet companies in China. So, in order to do business in China, blockchain companies will have to register for an ICP (Internet Content Provider) license.
4/ In order to obtain such a license, companies will have to abide by certain requirements, such as providing information on its business name, service type, ID addresses, service jurisdiction within 10 business days of service.
5/ There isn't really a good way to translate the ICP registration since there is no Western equivalent. Basically, it is primarily aimed to eliminate illicit activities done on a specific platform. Cost to register is zero, and the information is mostly contact-based.
6/ Think of it as a 'give us your company + officer information so you can do business in China as an internet content provider and so we have someone to go after if there is anything shady/illegal that result from your services"
7/ Also: any "blockchain service provider" must *not* service users who do not provide information to verify their real identity (i.e. phone #, ID #, or their company ID #. This is common for most internet companies in China, but could be difficult here.
8/ This also imposes certain recordkeeping requirements, including having a copy of a 6-month log of user content and comments (this probably includes community members in a slack/discord). These records will be turned over to relevant agencies if an investigation opens.
9/ Most of these regulations are not that out of the norm for any internet companies in China, but I think the one problematic point is the way that the rule over "users" is written, as it includes community members of a crypto project (even if the project is based abroad!)
10/ Two more things: the rules encourage self-regulation as a way to increase legitimacy for the blockchain/crypto industry. Also, to go the ICP registration path is actually a lot more flexible for blockchain companies to continue to operate in China, since burden to do is low.
