According to reports on Tuesday, a large quantity of U.S. media outlets were sent an email from an individual claiming to be a representative of the People’s Bank of China (PBOC). The message contained a phony invitation to a press conference between the media, the PBOC, and the Hong Kong Monetary Authority (HKMA) and said it would “crack down” on all aspects of bitcoin services between mainland China and Hong Kong.
A Mass Email Sent to U.S. Media Claimed Another Chinese Bitcoin ‘Crack Down’ Was Coming
Yesterday around 9 am EDT a press invitation and summary of the event was sent to a variety of U.S.-based news outlets. News.Bitcoin.com also received the email which was allegedly sent by a PBOC official from the bank’s Hefei branch. The message explained that on February 14 a press conference would be hosted by the PBOC’s Deputy Governor Pan Gongsheng concerning digital currencies. The email then went on to state that the PBOC and HKMA were planning to introduce new statutes that would end all businesses and services tied to the digital currency industry.
“The press conference will make it clear that neither the People’s Bank of China nor the Hong Kong Monetary Authority recognises Bitcoin or any other virtual currency as legal tender, thus, making its use as an official currency to settle debts and financial obligations illegal,” explains the email.
The Regulations will crack down on all aspects and services of Bitcoin trading in both Mainland China and Hong Kong. The Chinese authorities have already blocked access to all domestic and offshore cryptocurrency trading platforms; Hong Kong is yet to do so.
Additionally, the message said it would also introduce new laws making cryptocurrency mining “illegal” even though officials understand that China is home to the world’s largest community of bitcoin miners. “There is a perceived risk to the financial markets including a shadow banking sector that may provide unregulated services to avoid detection by authorities and to protect the identity of those providing and receiving the funds,” the email further detailed.
The PBOC Email: A Bogus Attempt to Manipulate the Price of Bitcoin
Interestingly enough there were only a few U.S. media outlets and blog sites that reported on this email. The cryptocurrency focused blogs Coin Idol and Coin Speaker, plus a few random people on Twitter, disclosed the ‘breaking news’ to the public. Then, the following day on February 7 the regional news publication the South China Morning Post (SCMP) revealed the email sent to the press was “bogus.” SCMP reports that the Hefei branch official’s email was compromised and he had no idea these emails were being sent to news publications and journalists.
The president of the Hong Kong bitcoin association, Leonhard Weese, said the email was likely sent to cause more FUD and panic throughout the cryptocurrency community. The purpose of the email was to manipulate the news in order to have some effect on the price in a market that was already extremely bearish.
“The objective of the bogus email’s senders was to spread rumours and panic, in the hope of manipulating the price of bitcoin, after taking short positions on bitcoin futures and betting that the price of bitcoin will fall, said Leonhard Weese, president of the Hong Kong bitcoin association.
“I’m not sure it always works, but especially when they can make use of mistranslations and ambiguities, I’m sure they can spread a bit of panic,” Weese further details to SCMP.
The ruse is effective especially in an immature market with a very low barrier to entry, and where there are many day traders who might be manipulated that way.
Fortunately, the news brought skepticism and most of the U.S. media did not ‘jump the gun’ reporting on the email and the alleged upcoming ban.
What do you think about the bogus email being sent to U.S. media claiming that China and Hong Kong would ‘crack down’ on bitcoin services and miners? Let us know your thoughts in the comments below.
Images via Shutterstock, and the PBOC.
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Author: Jamie Redman