Beginning mid-February, China’s Internet censorship agency will start regulating blockchain service providers in the country after approving set of regulations.
The Cyberspace Administration of China (CAC) announced on Thursday the new “Regulation for Managing Blockchain Information Services.” The regulation defines blockchain information service providers as “entities or nodes” that provide information services to the public utilizing blockchain technology through desktop or mobile. According to the announcement, the rules will be implemented on February 15.
One of the 23 articles written in the document obliges blockchain service providers to register with the CAC within 10 working days of starting of operation.
The CAC also requires blockchain startups to register their names, industry fields, service types, and server addresses. In addition, the agency strictly prohibits startups from using blockchain technology to “produce, duplicate, publish, and disseminate” content or information that is not allowed under Chinese laws.
Those who fail to comply with the said regulations will receive a warning from CAC and will be given a specified time to comply. Failure to act accordingly will bring a fine ranging from 5,000 yuan ($737) to 30,000 yuan ($4,422). The cost of the fine will be based on the gravity of the offense.
The CAC first expressed its plans to regulate blockchain-based data in October last year. The draft suggested that blockchain startups who are involved in publishing, news reporting, education, and the pharmaceutical industry must first get licenses from relevant authorities before registering with the CAC. The final rules, however, have dropped this entire article.
There are certain instances in the past that people tried to bypass China’s strict Internet censorship, which is widely known as “The Great Firewall.” For instance, the #Metoo movement and the recent pharmaceutical scandal in the country had individuals post data and information on the ethereum blockchain to bypass censorship.