TL;DR
- China escalates its crypto crackdown by blocking 120+ offshore exchanges and censoring WeChat crypto accounts
- PBoC and four other government bodies issue joint warning against illegal fundraising disguised as blockchain projects
- Tencent bans cryptocurrency transactions through WeChat Pay and shuts down major crypto media channels
- Beijing’s Chaoyang District and Guangzhou ban venues from hosting crypto promotional events
- Despite the crackdown, China continues investing in blockchain technology, with $3.57 billion committed since 2016
As September 2018 began, the cryptocurrency market found itself grappling with one of the most aggressive regulatory offensives seen in months. Bitcoin was trading at approximately $7,193, Ethereum hovered around $295, and the total market capitalization stood well above $220 billion — but beneath those numbers, a storm was brewing in the world’s second-largest economy.
China’s government had spent the better part of late August tightening the screws on every corner of the domestic cryptocurrency industry. What started as targeted actions against social media accounts snowballed into a coordinated multi-agency campaign that sent shockwaves through the global crypto community and raised fundamental questions about the future of digital asset regulation in authoritarian regimes.
WeChat Purge: Crypto Media Silenced Overnight
On August 22, WeChat — China’s dominant messaging platform with over 1 billion monthly active users — began systematically shutting down cryptocurrency-related accounts. The victims included some of the most prominent names in Chinese crypto media: Deepchain, Huobi News, Node Capital-backed Jinse, and CoinDaily, which had amassed more than 100,000 subscribers before its account was permanently suspended.
The official justification cited violations of the “Interim Provisions on the Development of Public Information Services for Instant Messaging Tools,” specifically the promotion of initial coin offerings and cryptocurrency trading. A WeChat official confirmed to Lanjinger, a local financial media outlet, that accounts were “permanently shut down for being suspected of publishing information related to ICOs and speculations on cryptocurrency trading.”
However, not everyone was convinced the purge was purely about crypto. Leonhard Weese, president of the Bitcoin Association of Hong Kong, suggested that some accounts may have been caught in a broader crackdown related to a massive vaccine scandal that had erupted in late July, when China’s drug industry watchdog accused Changsheng Biotechnology of producing more than 250,000 ineffective vaccines with falsified data.
Tencent Draws the Line on Crypto Payments
Two days after the WeChat account purge, tech giant Tencent — WeChat’s parent company — announced it would prohibit all cryptocurrency-related transactions through WeChat Pay, the platform’s mobile payments function. The move was significant: WeChat Pay was (and remains) one of the two dominant mobile payment systems in China, alongside Alibaba’s Alipay.
The timing was not coincidental. On August 24, five major government bodies — the People’s Bank of China (PBoC), the Banking Regulatory Commission, the Central Cyberspace Affairs Commission, the Ministry of Public Security, and the State Administration for Market Regulation — jointly issued a stark warning about the risks of illegal fundraising disguised as “blockchain” and “cryptocurrency” ventures.
The announcement specifically called out projects that used overseas servers to target Chinese investors, noting that “the funds for these illegal activities are mostly overseas, and supervision and tracking are very difficult.” The PBoC further emphasized that while China encouraged blockchain development, ICOs could not be considered legitimate applications of the technology, describing them instead as “speculative blockchain concepts for illegal fundraising, pyramid schemes and fraud.”
Venue Bans Spread From Beijing to Guangzhou
The crackdown extended beyond the digital realm. On August 17, Beijing’s Chaoyang District — home to the capital’s central business area — issued a formal ban prohibiting shopping areas, hotels, and office buildings from hosting promotional events for cryptocurrencies. Within days, a special economic development zone in the southern city of Guangzhou announced a similar prohibition.
These venue bans effectively made it impossible for crypto projects to hold meetups, conferences, or promotional events in two of China’s most important economic regions, further isolating the domestic crypto community from the public sphere.
The Blockchain Paradox: Suppression With Selective Support
What made China’s approach particularly striking was the stark contrast between its hostility toward cryptocurrencies and its enthusiasm for blockchain technology. In May 2018, President Xi Jinping himself had called blockchain a “breakthrough” technology. In August, the Communist Party published a book titled “Blockchain — a Reader for Cadre Leaders,” signaling that the technology was being integrated into the highest levels of government thinking.
Several local governments — including those of Hangzhou (home to Alibaba), Shanghai, and Nanjing — had collectively announced approximately $3.57 billion in blockchain investments since 2016. Private investment firms like BlockVC, which maintained offices in Beijing, were actively investing in 40 to 50 blockchain-related projects.
As Jack Lee, managing director at HCM Capital — the private equity arm of Foxconn — explained, the Chinese government’s primary concern was maintaining financial stability. Regulating activities that solicited money from ordinary citizens for investment purposes was the priority, not stifling technological innovation.
Why This Matters
China’s August-September 2018 crackdown established a template that would define its relationship with cryptocurrency for years to come: suppress speculation and retail trading while aggressively pursuing blockchain development under state control. The WeChat bans and venue prohibitions demonstrated how quickly a government could choke off crypto’s public presence when it controlled the dominant communication and payment platforms. For the global crypto market, it was a reminder that regulatory risk in major economies remained one of the most significant threats to mainstream adoption — a lesson that would be reinforced repeatedly in the years ahead as China would go on to ban crypto mining entirely in 2021.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.
120+ offshore exchanges blocked and WeChat crypto accounts purged. China has been at this since 2013
great_firewall_ 2013 and theyre still at it in 2026. the persistence is almost impressive
Tencent banning crypto through WeChat Pay was the real nail. most people in China used that for everything
Chaoyang District banning crypto events was wild. thats where most Beijing meetups happened
guangzhou banning venues from hosting crypto events was the one that actually killed local meetups. beijing was bad but guangzhou sealed it
shen_zh Guangzhou banning venues was the death blow for local communities. Beijing meetups just moved online but Guangzhou had real in-person infrastructure that never came back
wechat pay was everything in china. banning crypto through it was basically making it impossible for normal people to participate
$3.57B committed to blockchain while cracking down on crypto. China plays the long game
$3.57B on blockchain tech while making it illegal to actually use crypto. the disconnect was the whole strategy
Li Wei $3.57B on blockchain R&D while making crypto trading illegal is peak policy doublespeak. they wanted settlement rails without capital flight risk
Li Wei china spending $3.57B on blockchain R&D while making crypto illegal was peak doublespeak. they wanted the tech without the capital flight
Tencent banning crypto transactions through WeChat Pay killed the easiest onramp for millions of Chinese users overnight. that was the real damage
wenjie_l nailed it. killing WeChat Pay as an onramp didn’t stop crypto trading it just made it more dangerous for normal users who had to go through unverified OTC sellers.
120 exchanges blocked and OTC desks in Shanghai kept running through WeChat groups the entire time. the crackdown was theater for state media. real volume just went underground
blocking 120 exchanges and OTC desks on WeChat exploded the next day. china created a shadow market by trying to kill the visible one
Tencent blocking WeChat Pay crypto transactions was the one that actually hurt. Alipay and WeChat Pay are how normal people move money in China. cutting that rail was more effective than any exchange ban
Mei C. WeChat Pay was the only rail that mattered for normal users. cutting it did more damage than blocking 120 exchanges combined
blocking 120 exchanges and people just moved to OTC desks on telegram. the ban basically created a parallel shadow market
blocking 120 exchanges did nothing. OTC desks on wechat and telegram exploded after the ban. the supply of crypto demand in china is impossible to regulate away
jianhao is right about OTC exploding but the WeChat ban still dried up fiat onramps for regular people. OTC went underground it didn’t replace the volume WeChat Pay was doing.
Yongjin S. the telegram OTC desks got so liquid after the ban it basically built alipay’s shadow competitor. unintentional market building
OTC_desk_drift the telegram OTC desks after the ban basically built Chinas shadow crypto market. government tried to kill it and accidentally made it more resilient
the Chaoyang district ban on crypto events flew under the radar but it set the template other cities copied. Guangzhou followed within weeks.
blocking 120 exchanges while citizens use VPNs to trade anyway. performative regulation at its finest
blocking 120+ offshore exchanges and censoring WeChat accounts in the same week was coordinated. PBoC wanted zero crypto chatter before the joint warning