Shanghai Man: China's annual ban explained, 'crypto crash' trending ... and more

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

Is China banning crypto again?

FUD watchers got a glimpse of an old favorite as three government bodies in China, including the China Internet Finance Association, the China Banking Association and the China Payment and Clearing Association re-warned the public about the risks of investing in cryptocurrencies. This dates back to a 2017 ruling that all exchanges must close and a 2018 ruling on ICOs. But is it actually illegal?

For starters, these types of announcements are a good indication that cryptocurrencies are starting to flare up in popularity. Whenever speculative digital assets begin to grab headlines and seep into more mainstream culture, these warnings and reminders are common as a method of discouraging more open adoption.

Last year it was established that owning virtual currencies was not in itself illegal, only that virtual currencies could not be used as legal tender. Even though exchanges are supposed to be illegal, numerous exchanges operate within the country, even partnering with government organizations in free trade zones and hosting large events. There is very much an understanding of being free to innovate, as long as it doesn’t start breaking other laws, such as money laundering, fraud or aiding capital flight. If not for this convenient truth, there probably wouldn’t be much of a column left for Our Man in Shanghai to write about.

FUD leads to epic crash

The China FUD seemed to be the tipping point as people’s fears of a 2018-like bear market began to seem real. “Cryptocurrency crash” became some of the hottest keywords on the Chinese internet, showing up third on the trending list of both search engine Baidu and micro-blogging platform Weibo. An asymptomatic COVID-19 case in central Anhui province took the number one spot, in case anyone was wondering.

Bank not Nervos about regulations

The Nervos Foundation has launched an innovation fund with CMB International, a wholly-owned subsidiary of China Merchants Bank. China Merchants Bank is one of the top ten banks by holdings, with over 84,000 employees. The joint fund is intended to kickstart ecosystem building on top of Nervos and provides strong validation for the Hangzhou-based blockchain network.

Shanghai’s big event

If you were looking to meet top blockchain influencers and projects in China this week, odds are Shanghai was the best place to find them. The Bellagio hosted the World Digital Assets Summit, a glamorous event which featured panels, keynotes, charity auctions, and banquets for many of the top projects and VCs in the space. The offline events calendar is back in full force in China, which has managed to avoid the major lockdowns faced by many other countries in 2021.

Huobi ventures into $100 million fund

Huobi Group, which owns the top cryptocurrency exchange by the same name, set up an investment arm on May 14th. This fund will primarily target projects that support NFTs, gaming, and Huobi’s very own smart chain, HECO. Huobi Ventures will inject $100 million into projects via strategic investments and mergers and acquisitions over the next three years.