Chinese Authorities Publish Rules For Blockchain Companies In Country
The Chinese government agency responsible for censorship on the Internet has established rules for companies that provide services on blockchain, CoinDesk reports, referring to the government website.
The Cyberspace Administration of China (CAC) has published a regulation, in which it defined the order of actions of blockchain companies under Chinese law. The document will enter into force on February 15, 2019.
As follows from the rules, information services providers using distributed ledger technology are “entities or nodes” that offer them to the customers through the Internet with the help of computers or smartphone applications.
The document consists of 23 articles, one of which requires service providers applying blockchain to be registered with CAC within ten working days from the beginning of their activities. Startups using the technology will have to provide information about themselves, including the name, course of action, type of services rendered, and server addresses.
The CAC's provision prohibits the use of blockchain technology for the production, duplication, publication, and distribution of information banned by Chinese law. In case of non-compliance with the rules, companies will be subject to administrative liability. A warning will be issued for the first violation, and a fine of 5000 yuan ($737) to 30,000 yuan ($4422) will be imposed for subsequent violations.
The draft of the regulation was initially issued in October 2018. The document contained an article suggesting that blockchain startups working in the field of information services, education, and the pharmaceutical industry should obtain the CAC license, but this clause was excluded in the final version.