The “Administrative Measures for Online Marketing of Financial Products” (Announcement No. 9), dated April 21, was completed by China’s central bank and seven other authorities and was officially released on Friday.
The regulations forbid any group or person from providing online marketing services or any other kind of support that enables unlawful financial activities, and they go into force on September 30. They limit the online marketing of financial products to licensed financial institutions and lawfully entrusted third-party platforms.
Stringent Regulations
In 2021, the People’s Bank of China made it clear that all crypto transactions were prohibited. Now, the language goes even beyond by including digital currency issuance and trading, as well as illicit foreign exchange margin operations, in the definition of illegal financial activity.
Platforms, intermediaries, and content creators may be held liable for enabling or failing to prohibit aggressive or deceptive online promotion, including livestream selling and viral campaigns centered around leveraged or opaque products. The actions are framed by officials as consumer protection regulations.
Many Chinese government agencies are involved in overseeing financial markets and securities, including the People’s Bank, Ministry of Industry and Information Technology, State Administration for Market Regulation, National Financial Regulatory Administration, China Securities Regulatory Commission, State Intellectual Property Office, Cyberspace Administration of China, and State Administration of Foreign Exchange.
Most onshore activity is now outside of China’s official financial system due to the country’s prohibition on crypto-related services provided by financial institutions and domestic crypto-trading platforms and mining initiatives.
In order to crack down on unlawful financing, the new rules crack down on digital marketing, warning platforms, middlemen, and content providers that helping to promote prohibited items is a crime in and of itself.