China dampens blockchain fever with cryptocurrency trading crackdown

China has initiated a fresh crackdown on virtual currency initial coin offerings and cryptocurrency trading – which are banned in the country – in response to a surge in blockchain fever.

The governments of top tier cities, including Beijing, Shanghai and Shenzhen, issued risk alerts to the public, warning of “illegal fundraising”, financial frauds or pyramid selling.

They also joined hands with the national internet finance association and the computer network emergency response centre to search for local traces of activity on the ground and tried to cut off connections with offshore platforms.

The coordinated endeavours came after President Xi Jinping hailed the use of blockchain technology in late October, a move meant to push technological development and troubleshoot with new technologies but which unexpectedly fuelled investor enthusiasm for cryptocurrencies.

The price of bitcoin, the most well-known application of the technology, rose nearly 40 per cent to more than…