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Encryption industry regulatory investigations escalate, practitioners face new challenges.
Is the encryption industry facing a new round of regulatory pressure?
Recently, it has been reported that a major city has started investigating local encryption practitioners. It is said that local police have been collecting information and questioning personnel in the encryption industry since June 8. This incident has sparked speculation and discussion within the industry about the possible tightening of regulatory conditions for the encryption sector.
According to relevant reports, the individuals under investigation were required to bring their laptops to the police station to cooperate with data collection and information recovery work. Some have stated that the police used professional equipment to recover deleted instant messaging software chat records.
The analysis suggests that this investigation may focus on the following groups: individuals who have previously participated in token issuance or project financing; companies or individuals with records of overseas fundraising, capital repatriation, or cross-border transfers; and those engaged in community operations, user acquisition, and similar activities.
There is a viewpoint that this may be a prelude to a nationwide inspection. The city has gathered a large number of web3 talents, and local cross-border virtual currency transactions are active, which is why it was chosen as the first city to carry out large-scale investigations.
However, from a legal perspective, there is currently no sufficient evidence to indicate that mainland China will further crack down on the encryption industry based on existing policies. If the news is true, there may be the following explanations:
Local large encryption teams may be involved in criminal cases, leading to a thorough investigation of the entire industry;
Based on relevant clues from financial regulatory authorities, the public security department is investigating encryption practitioners in the jurisdiction.
Prepare for future possible taxation policies on encryption assets for tax considerations.
It is important to note that citizens' private property is protected by law, and any search or seizure must follow legal procedures. Although the police have the right to verbally summon citizens to cooperate with investigations, if they wish to further collect data from electronic devices, they need to present the corresponding legal documents.
Since September 2021, China has implemented a comprehensive ban on virtual currency-related business activities. However, the current policy does not explicitly prohibit individuals from investing in virtual currencies; it merely states that related civil legal actions are invalid, and any losses incurred are to be borne by the investors themselves.
Nevertheless, there are still some controversies in actual law enforcement. To avoid potential legal risks, it is currently recommended that mainland citizens participate cautiously in virtual currency trading activities.
It is worth noting that not only in mainland China, but also globally, cryptocurrency regulation is becoming stricter. Recently, places like Singapore and Hong Kong have implemented more stringent regulatory policies, and the attitude of the United States is not entirely friendly either.
The future development of cryptocurrency still has many uncertainties. However, true believers in encryption may not need to focus too much on the attitudes of centralized institutions, but rather should be dedicated to realizing the true value of encryption and promoting its application and acceptance in broader fields.