Wechat Plans to Forbid Merchants From Cryptocurrency Transaction

As No. 1 messaging app in China, Wechat is also widely used for cryptocurrency transaction in China. Recently, Wechat Payment has revised the “Wechat Agreement for Payment Service”, which involves the control and regulation of illegal transaction such as cryptocurrency. The revised agreement will be put into effect on 31th May, 2019.

As the first, the second and the third  terms of the agreement states: no direct or disguised engagement in Internet gambling, pornographic platforms, Internet lottery sales platforms, illegal foreign exchange, precious metal investment trading platforms, illegal securities and futures trading platforms, token issuance financing and cryptocurrency trading platforms are not allowed on wechat. Assets management business on the Internet without the approval of the regulatory authorities is not allowed as well as  illegal transactions such as commodity trading places without the approval of the provincial government, or Tenpay, the payment platform of wechat shall have the right to stop the payment and settlement services.

Early in August last year, Tencent issued a statement about its measures on rectifying the chaos of ICO and cryptocurrency. Tencent said that it had taken the following measures in response to violations in terms of payment channels.

  1. Restrict the collection limit of the illegal platform account and prohibit it from cryptocurrency transaction on Wechat.

  2. Limit the amount of individual sellers’ accounts, only providing the daily use of social activities, and the collection of transactions related to cryptocurrency are limited as well. At present, all cryptocurrency transactions by using merchant names have been cleared up.

  3. Conducting real-time monitoring of daily transactions, risk severity assessment of transactions based on monitoring results, or taking direct interception measures for illegal transactions.

At that time, Tencent has established a targeted risk control model to identify personal cryptocurrency transfer and transactions, and it took corresponding measures for violations discovered by platform or compained by users at once.

Aside from WeChat, Alipay, the top payment platform has also closely monitored the transactions involving individual cryptocurrency transactions, and established a patrol system for key websites and accounts.

Alipay said that, it will take measures such as limiting account collection function or even permanently limiting collection for personal accounts suspected of virtual currency transactions according to concrete circumstances. Going forward, Alipay and ants will continue to closely monitor the off-site trading activities involving cryptocurrency, and establish a patrol system for key websites and accounts.Last year, Alipay has investigated and shut down about 3000 accounts involving cryptocurrency transactions.

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