This headline may come as a surprise to some, but recent information (and clarification) provided by Chinese-speaking members of the cryptocurrency community have clarified and ‘busted’ claims circulating around various media outlets over the last few months with regards to China (the nation itself) providing a ranking of cryptocurrencies.
Examples of such headlines are below:
China’s Center for Information and Industry Development has released its latest crypto project ranking. The center evaluated one more crypto project this month, bringing the total number of ranked projects to 34. Bitcoin has been downgraded while the top two positions remain unchanged.
China has released its latest government-sponsored rankings of major cryptocurrencies, placing Bitcoin in 15th, while EOS keeps its top spot.
The Top 10 Blockchains, according to China: 10. @SteemNetwork 9. @NEO_Blockchain 8. @GXChainGlobal 7. @nulsservice 6. @OntologyNetwork 5. @nebulasio 4. @bitshares 3. @ethereum 2. @Tronfoundation 1. $EOS Would your ranks look any different? https://t.co/7UqVUfNb6k
Debunking the Myth of China ‘Ranking’ Blockchain Projects
Known cryptocurrency advocate (for VeChain specifically) and Chinese native, Ben Yorke posted a stream of tweets on February 28th, 2019, breakign down why the notion that China (as a nation) was providing ratings of blockchain projects is both absurd and false.
Below are select tweets from Ben Yorke that give greater clarification on what these rankings actually are, where they come from, and what their real ties are to the Chinese government:
1. I try to avoid knocking other projects – so I’m not going to mention any names, but every time SaidiWang (CCID) puts out a monthly rankings people go nuts. Are they an affiliate of an official Ministry? Yes. However, I contacted the curator of the list months ago…
2. He was very clear that being an affiliate doesn’t make them an official mouthpiece, and that the rankings were independent. There are 150,000 state owned enterprises in china, all of them could decide to throw out a list of whatever they wanted – doesn’t mean anything
4. If anyone doesn’t trust my opinion, the phone number i called is at the bottom of the website. Find a Chinese speaker and have them ask the company if their thoughts reflect the opinions of the Ministry of Industry and Information. DYOR, people
Dissecting Ben’s Claims
While Ben does have a lengthy history of posting about cryptocurrency and he is verifiably domiciled in China with a fluency in the native tongue, we’d be remiss if we did not explore these claims further.
So our next task moving forward will be to look at other objective evidence that corroborates Ben’s statements.
Supporting Evidence #1 — China Banned ICOs in 2017
TechCrunch (and numerous other sources) reported on China’s blanket ban on all ICO funding back in 2017:
It is looking like a new era is coming for ICOs, at least those in China for now. In the U.S., the SEC has issued official warnings around the risks of ICOs, also known as token sales, but the Chinese government looks set to beat it to implementing regulation around the rapidly growing fundraising …
This was the beginning of China’s aggressive efforts to make its antagonistic stance against cryptocurrencies widely known.
Supporting Evidence #2 — China’s Increased Restrictions on Cryptocurrencies in 2018
In 2018, China ramped up its prohibitive cryptocurrency legislation.
According to CNBC, “On Aug. 24, five government bodies — the People’s Bank of China, the Banking Regulatory Commission, the Central Cyberspace Affairs Commission, the Ministry of Public Security and the State Administration for Market Regulation — issued a warning about risks from illegal fundraising under the guise of “blockchain” and “cryptocurrencies.” The announcement also called out those who used overseas servers while targeting Chinese investors.”
Oh, and if that wasn’t enough, China also blocked its citizens from accessing over 124 cryptocurrency exchanges on that same day:
Chinese regulators continue their tough stance against offshore cryptocurrency exchanges. To curb the access of mainland investors to cryptocurrency trading through such offshore exchanges, Beijing’s internet finance watchdog, the China National Fintech Risk Rectification Office, has identified 124 offshore crypto exchanges.
Supporting Evidence #3 — Tencent Basically Wiped Anything Crypto-Related Off its Plaform in August 2018
Tencent (an extremely popular social media company in China) also announced that it would remove all cryptocurrency transaction processing and compatibility from its platform on August 24th, 2018:
This move was also accompanied with the explicit prohibition of any and all trading/ICO information related to cryptocurrencies. Tencent announced that those found in violation of this policy would be promptly removed from the platform (i.e., banned):
WeChat accounts which billed themselves as cryptocurrency information providers were shut down Tuesday after being suspected of promoting cryptocurrency trading and initial coin offerings *Apps connected to these accounts are still available, but sources close to regulators say they will be targeted next Several blockchain-related social media accounts were shut down on Tuesday evening as the government cranks up the pressure on cryptocurrencies.
What is Tencent?
If the scope of this prohibition is lost upon you, don’t worry — we got you covered.
Tencent is a Chinese social media company that essentially has a monopoly on instant messaging and social media in China. As such, their user base is absolutely enormous. For reference, imagine if Facebook, Twitter, Instagram, and Snapchat all teamed up together to form one super social media company.
That’s what Tencent is in China.
To put the magnitude of this impact into perspective, it is worth considering that, in 2014, it was reported that Tencent owned 3/5 largest social media platforms on planet earth:
The number of internet users on Earth recently surpassed three billion, and nearly half of them – 1.35 billion – are on Facebook, according to social media agency WeAreSocial. That’s roughly equal to the entire population of China. Ironically, very few of Facebook’s users actually live in China, where the government has blocked the behemoth social network for several years.
In 2018, Tencent earned the title of ‘World’s Most Valuable Social Network Firm’ (Yes, that beats out Mr. Zuck of Facebook and Instagram):
The Chinese technology giant Tencent recently overtook US rival Facebook to become the world’s most valuable social network company, with a market capitalisation of US$540 billion. Yet it is sitting on an advertising goldmine. Just 18% of its total revenue in the 2016 fiscal year came from online advertising.
China’s Government and Tencent Go Hand-in-Hand
China’s political structure dictates that companies such as ‘Tencent’ are only able to exist with the government’s blessing and a major caveat that comes with this cooperative relationship is that Tencent must acquiesce to any and all requests by the Chinese government.
Thus, if there is a sweeping change on the platform (like the one that occurred on the same day as the Chinese gov’t announcement prohibiting all blockchain-related funding), it is more than likely that the shot was called from the ‘top’ (i.e., the Chinese government).
Supporting Evidence #4 — China Has Openly Celebrated the Effectiveness of its Cryptocurrency Restrictions
In a piece released by Chinese publication, ‘XinhuaNET’, on July 7th, it was reported that the People’s Bank of China had lauded the country’s regulatory efforts in cutting down cryptocurrency usage.
According to the article:
“The People’s Bank of China said the country had ensured a zero-risk exit for 88 virtual currency exchanges and 85 ICO trading platforms, since September 2017.”
Supporting Evidence #5 — China Had Issued Explicit Travel Bans on Huobi and OKCoin Executives Specifically in 2017
China was so hell-bent on curbing cryptocurrency trading that it actually issued a ban on executives from cryptocurrency exchanges, ‘OKCoin’ (OKex) and Huobi.
“ Local media […] reported that travel bans had been issued for [OKCoin and Huobi] executives, pending a government investigation into the venues.”
Supporting Evidence #6 — China Has Been on a Crusade to Track Down Any and All Cryptocurrency Miners
China has made it their mission to consistently hunt down any and all cryptocurrency miners within the nation’s purview.
Numerous sources have reported on China’s extremely antagonistic stance toward crypto miners:
China’s government is planning to shut down Bitcoin miners in its latest crackdown on the cryptocurrency. The Leading Group of Internet Financial Risks Remediation has requested that local governments make an “orderly exit” from the industry.
Having shut down the exchanges where cryptocurrencies like bitcoin are traded, the Chinese government is now going after the facilities where such currencies are “mined.” To do so, it’s hitting such operations where it hurts: electricity supply. Fresh reports have emerged about a crackdown-though not an outright ban-on bitcoin mining operations in China.
Evidence Strongly Supports Ben Yorke’s Statements
Given China’s extremely antagonistic stance toward cryptocurrencies, Ben Yorke’s assertion that the blockchain rankings that are stemming from within China are entirely separate from the views of the Chinese government seem to be corroborated.
One must remember that these reports, which are always attributed to the nation of China itself, were still being published amidst all of the substantial efforts on the part of China to eliminate any and all affiliation, participation, trade, mining or mention of cryptocurrency within the nation.
When looking at China’s legislative and governmental actions objectively, it appears as though China has successfully banned everything but thinking about cryptocurrency at this point.
Thus, the idea that this same nation would be simultaneously researching the cryptosphere and publishing a list of their favorite cryptocurrencies is extremely implausible, at best.
Which Chinese Firm is Releasing These Reports?
The name of the company behind these blockchain reports is ‘SaidiWang’, or ‘CCIDNET’.
Further research into this company led to its website (in Chinese; must be translated if you are not a native speaker) where the following statement was posted:
“ The CCID Blockchain Research Institute is a specific organizational unit, which is widely used in various social industry think tanks, association organizations, scientific research institutions, and districts. Blockchain industry enterprises, in conjunction with industry authorities to promote blockchain technology and industrial health and orderly development, promote blockchain technology to empower the real economy.’”
This statement (along with the evidence provided by Ben & China’s crypto legislation) all point to the conclusion that these blockchain reports are actually being produced independently of China.
At this point, unless sources are able to provide independently obtained evidence that refutes the facts presented within this piece and what Ben Yorke was contributed, then any and all mentions of China, the nation, publishing blockchain rankings should be considered fake news.