Shenzhen Cracks Down on 39 Illegal Crypto Firms

So, Shenzhen, which is basically China’s blockchain hotspot, is about to get serious on cryptocurrencies. They’ve found around 39 crypto companies in the city that are operating illegally. China's tech heart, often called ‘Silicon Valley,’ might soon see a big crackdown on dodgy businesses, especially scams and Ponzi schemes. Shenzhen has become a breeding ground for these crypto scams. Authorities have flagged these 39 companies for tricking regular folks. The situation is just bizarre to me. It's so strange. After initially showing support for blockchain and shutting down crypto mining, now you have these shady companies thinking they're in the clear. They’re really exploiting the situation, thinking the government is okay with their scams. This just keeps feeding into the negative perception of Bitcoin and crypto in China. These fraudsters are really tarnishing the image of the entire crypto sector, not just blockchain technology. Oh, and it's also not true that Binance got raided, according to CZ himself. So does that mean crypto companies in China that are legitimate can operate without issues? Someone correct me if I’ve got it wrong. Appreciate it!

We don't really have much knowledge when it comes to crypto entities in China, though we can be certain that CZ's Binance is in good hands knowing that he's somewhat into the inner circles of the elites in there. Probably the ones that are not that big would be the ones affected by these crackdowns and not those which are already established and may prove to be of use to the government. You know how things work in China: if you can provide something to the table, you're good, and if not, you're forced to find opportunities elsewhere.

Ponzi scams are destroying the good name of Bitcoin and cryptocurrency in general. Well, Chinese are also good at scamming and scammers are good at taking advantage of any opportunity they can find. Maybe these scammers are thinking that since China is now a pro-blockchain country then they can start fooling their own fellowmen using the intricate pyramiding investment schemes appealing to the greed of anyone. On the side of the government, this is adding another layer of the many reasons why authorities are not inclined to allow cryptocurrency to officially enter the Chinese market.

These Chinese scammers really thought that they could go against their government, and as of now they're considered as terrorist on their own country. If you're going to rob your fellow countrymen, you're one of the traitors of your own race. China's idea of being pro-blockchain has to be reviewed in connection with the ongoing issues, before the entire country will allow particular legalities which to be implemented seriously to avoid scammers to target another victims.

I go over to the link provided but I can't see the list of the 39 companies in the article. I'm curious because I have invested to some Chinese crypto, none of them were listed in coinmarketcap but they do have a market of their own where I did buy them. Maybe if you can post in reply of this thread, will be much convenient for anyone reading this. I know OP had been spamming this website for weeks so its his nature to led us there.

Your fear is really valid though and its something that should be a concern to everyone who wants the progress of the crypto industry. The point is there will always be some set of people who will want to take advantage of innocent free thinking individuals for their own selfish gains and they would go any length to perfect such scam and most important their own bottom line. Unfortunately there is nothing we can do about it than to give support to any organisations trying to clamp down on such activities no matter our grouse against the government or that they are trying to be all controlling, we should all know that the crypto sphere needs to be weeded out those unscrupulous individuals.

but there is rumor going on that there will be a real official licence to exchanges soon

Do you have a source for this? I'm not sure if things have changed since (this is from November 2, 2019), but Binance's CEO and other people based in the PRC debunked a photo which some people claim to be an official crypto exchange license: Considering the risk of capital flight and China's shaky position at the moment, I don't think they'll be allowing exchanges to operate freely and legally anytime soon.

Generally, the government hates it when fellow Chinese are victimizing their kin or fellow citizens though it can be a different story if they are doing it abroad. Nonetheless, I am supporting this strong stand of the government against any scams using the easy facility of cryptocurrency. Whether a country is accepting or recognizing Bitcoin or any cryptocurrency for that matter or not, we should never allow any scam to destroy other people's lives and at the same make the image of cryptocurrency really compromised.

I got a feeling that even before China ruled in favor of crypto these illegal operations from these companies already existed. They are "illegal" in the first place and they don't see any kind of requirement to operate. The crackdown that is happening now only justify that they already operating in their Silicon Valley before any kind of support from the government.  This is something commonly done by greedy people who are taking advantage of the demand and instead of having a legitimate business they will opt out to a much easier way of getting money which is scamming them. This is a good move from the Chinese government as it is a plus to see that they are trying to remove scams from happening in the industry.