Journalist: Jason Lu | Editor: April Cho, Teresa Wang
Why is this important?
China tightening its control over blockchain media, particularly ICO information
Chinese authority already cracked down several popular WeChat official accounts in August
On October 19th, China announced a potential regulation draft that would tighten controls over blockchain information providers. The draft increase censorship over the media content and requires stricter registration requirements for all coverage providers. Prior to this development, Chinese authorities had already begun cracking down on several popular blockchain WeChat official accounts covering blockchain news since August 21st, including top outlets like Junse Finance and TokenClub.
The potential regulatory crackdown would be issued by the Cyberspace Administration of China (CAC) in a draft titled“the Regulations of Blockchain Information Providers.” The regulations would require media outlets to register its users and subject content creators to annual censorship by the body. According to the CAC, blockchain information providers are defined as organizations disseminating blockchain-related information to the public via WeChat official account and website. The regulation is currently in the discussion phase and will not be put into effect until Nov 2nd.
Chinese Blockchain Media Ecosystem
Before going deep into Chinese blockchain media, it is important to understand the significance of the WeChat official accounts in the blockchain media ecosystem. In China, a WeChat official account is the Chinese equivalent of Facebook fanpage. By creating an official account on WeChat, media and businesses engage with userbases that often reach into the millions through messages and posts. In short, these WeChat official accounts have a massive influence on their readers: Case in point, by August 2017, the Wechat monthly active users (MAU) eached 792 million, double the number of Twitter MAU.
It comes as no surprise that every blockchain media outlet in China has an WeChat official account. Typically, when a Chinese blockchain company launches its ICO, it requests a blockchain media outlet to promote its campaign on this account. As these types of partnerships increased, the blockchain media also grew to become a profitable industry.
BJ news,a Chinese media outlet, interviewed former crypto PR expert named Lee who revealed that an established blockchain information provider could earn approximately 20 to 30 million RMB (about 2.9 to 4.3M USD) monthly simply through these partnerships with blockchain companies. For examples, these media outlets would sell content: a headline for 200,000 RMB, an interview for 15 Ethereum, or a news piece for 2 Ethereum. Despite of the exorbitant charge, these service are still popular among crypto circles because of the ability to reach a wide audience. While new-comers in the media and PR industries might not be able to enjoy the same profits, they can still receive nearly 1,000 RMB for every piece released, ensuring a monthly income of over 100,000 RMB.
However, this previously unregulated industry recently faced unexpected crackdowns after the developments on media censorship in August. A few of the most famous blockchain official accounts were suspended by officials overnight, including Deepchain, Jinse Finance and Tokenclub. The crackdown particularly targeted official accounts advocating cryptocurrencies investments.
Tightening Regulations on Chinese Blockchain Media
The Cyberspace Administration of China (CAC), the governing body for regulations on the internet, released a draft regulation on October 19th intended to shore up censorship over blockchain information providers. Key parts of this draft regulation will require more information on the blockchain media users and increased censorship over content. More specifically, they include establishing report systems and submitting information on people found guilty. The draft also requests blockchain information providers to submit user information including mobile number and national identification numbers of those browsing these websites.
Similar to the way the US National Security Agency can ask internet service providers such as Google, Facebook, or Yahoo to cooperate with criminal investigation, CAC regulations can require information providers to provide necessary assistance for governments if (what are the requirements that allow them to ask”). One key difference is that a legitimate reason to ask for this user information is to “stabilize society.”
According to the draft, the grounds for CAC intervention is the identification of any behavior deteriorating national security, damaging social orders, infringing copyright, and spreading information against the law.. However, many critics of the regulations have suggested that the criteria for these supposed regulatory violations are often ambiguous, leaving too much room for interpretation.
Media bodies that run afoul of these laws will be subject to fines and suspension, or in some cases can be shut down entirely. The regulatory response will dependent upon the severity of violations. For instance, while refusing registration on CAC online system will be fined between 10,000 to 30,000 RMB., spreading information that are in opposition to national laws can be fined up to 30,000 RMB.
The current draft is expected to come into effect on Nov 2nd. Currently, CAC is still collecting public opinion on the regulatory draft. However, upon the enactment of the CAC regulation, blockchain information providers will be required to comply with all measures within 10 days.
