Crack­down on WeChat drives bit­coin devo­tees to Tele­gram

The Star Malaysia - StarBiz - - Features -

WECHAT is start­ing to see its first wave of de­fec­tors: Chi­nese cryp­tocur­rency af­fi­ciona­dos.

The coun­try’s crack­down on bit­coin and WeChat, the na­tion’s dom­i­nant mes­sag­ing app, is send­ing users of both to Tele­gram and other en­crypted ser­vices banned in the coun­try. With ad­min­is­tra­tors per­son­ally li­able for what is said on groups they run, users of bit­coin ex­changes OKCoin, Huobi and BTCChina are mi­grat­ing to ser­vices be­yond the Chi­nese gov­ern­ment’s reach. On Tele­gram they are pop­ping up to dis­cuss ev­ery­thing from how to trans­fer their dig­i­tal to­kens over­seas to more ef­fec­tive ways to pro­tect pri­vacy, to ini­tial coin of­fer­ings.

The new rules on mes­sage groups have de­liv­ered a rare set­back for WeChat, which per­me­ates the daily life of 963 mil­lion users and un­der­pins Shen­zhen-based Ten­cent Hold­ings Ltd’s US$400bil mar­ket val­u­a­tion. The crack­down has con­verged with a tight­en­ing on dig­i­tal cur­ren­cies as China de­clared ICOs il­le­gal, damp­ened cryp­tocur­rency trad­ing and is said to con­sider a ban on do­mes­tic bit­coin ex­changes.

“It’s par­tially due to fears of bit­coin over­sight, but I think it has more to do with the new rules on WeChat,” said Jake Smith, gen­eral man­ager at bit­, who man­ages a 500 peo­ple English lan­guage group on WeChat. Smith, a US na­tional, said he has been asked by an­other Chi­nese group owner whether he could re­place the per­son as ad­min­is­tra­tor, due to be­liefs that for­eign­ers are ex­empt from the new reg­u­la­tions.

Ten­cent spokes­woman Jane Yip didn’t re­spond to a re­quest for comment.

The crack­down on bit­coin has seen BTCChina, Shang­hai’s largest ex­change, say it would halt trad­ing by the end of Septem­ber. Some over-the-counter plat­forms, in­clud­ing those op­er­ated by Bitkan, sus­pended ser­vices this week.

Cryp­tocur­rency groups on WeChat have been quick to dis­band and mush­room overnight on Tele­gram. While there are no fig­ures on how many peo­ple have done so, at least 30 such groups have ap­peared, with some al­ready at­tract­ing more than 1,000 users in a sin­gle room, mostly speak­ing Chi­nese. OKCoin, Huobi and BTCChina’s tele­gram groups are not of­fi­cially run by the com­pa­nies, ac­cord­ing to the no­tices. Chi­nese au­thor­i­ties said on Sept 7 that start­ing next month cre­ators of on­line groups are re­spon­si­ble for the be­hav­ior of mem­bers. Al­ready, 40 peo­ple from one WeChat group have been dis­ci­plined for spread­ing pe­ti­tion let­ters while ar­rest­ing a man who com­plained about po­lice raids, ac­cord­ing to re­ports in of­fi­cial Chi­nese me­dia.

While Tele­gram is of­fi­cially blocked in China, users can ac­cess the ser­vice through vir­tual pri­vate net­works. As a for­eign en­crypted plat­form, it is some­what be­yond the grasp of the coun­try’s au­thor­i­ties.

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