China slaps tech giants with heavy fines as regulators crack whip on cryptocurrency

Companies including Internet titans Tencent Holdings and Alibaba Group were fined by China’s anti-monopoly regulators in a new move to put more teeth on the companies’ fast-growing businesses.

According to the Associated Press, 22 companies including six under the control of Alibaba, five by Tencent and two by retailer Suning.com, Ltd were slapped with 500,000 yuan ($75,000) in fine for investing in other companies that could jack up their market valuation.

Chinese officials are not comfortable about the growing clout of its major internet service providers, which are pouring more money into finance, health care services and other key areas.

China threatens to nip crypto in the bud

In a related development, China’s clampdown on cryptocurrencies is unlikely to stop with bitcoin mining.

Chinese regulators in the mainland have indicated that other virtual coins, particularly stablecoins, also pose a serious threat to its economy.

Going back to the pressure being faced by Alibaba and Tencent, the imposition of an anti-monopoly policy especially in the technology sector is a priority for the Chinese government for 2021, the ruling Communist Party said.

This comes as China’s regulators hit Alibaba with an 18.3 billion yuan ($2.8 billion) fine in April for charges of stifling fair market competition, reports said.

Other Chinese companies have been penalized or reprimanded for breaching data protection, competition, and censorship and other rules.

Separately, China’s central bank said it will ensure further regulation of Chinese payments companies, in reference to its massive overhaul of Ant Group.

“Monopolistic practices do not only exist in Ant Group, but also in other institutions. We will implement the measures that we took against Ant Group on other payment service entities,” CNN quoted Fan Yifei, deputy governor of PBOC, as saying.

Paranoid about crypto

Meanwhile, with China’s financial health coming into question, the crackdown on bitcoin and other cryptocurrencies is viewed by many analysts as a way to suppress one of the potential sources of instability.

The United States Treasury, the Reserve Bank of India, the South Africa Reserve Bank, and other financial institutions are also warning its own people to be cautious of the risk that cryptocurrencies carry.

 

Image courtesy of Cointelegraph News/YouTube

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