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China: Rules on Blockchain-Based Information Services Issued Requiring Authentication of Users’ Real Identities

(Feb. 12, 2019) On January 10, 2019, China’s cyberspace information regulator, the Cyberspace Administration of China (CAC), issued the Administrative Provisions on Blockchain Information Services, a set of rules governing blockchain-based information services. The Provisions will take effect on February 15, 2019. (Administrative Provisions on Blockchain Information Services (Jan. 10, 2019, effective Feb. 15, 2019) (Provisions), CAC website (in Chinese); Stephanie Wu et al., Internet Watchdog Issues First Measures to Regulate Blockchain Services, LEXOLOGY (Nov. 30, 2018).)

According to the Provisions, the CAC formulated these rules on the basis of the Cybersecurity Law passed in 2016, the Administrative Measures for the Internet Information Services issued by the State Council in 2000, and a 2014 State Council circular granting the CAC the power to regulate internet information contents in China. (Id. art. 1.)

The Provisions regulate blockchain-based information services provided in China. “Blockchain information services” refers to services providing information to the public through websites or applications that are based on blockchain technology or systems. (Id. art. 2.)

“Blockchain information service providers” is broadly defined to include (1) entities and nodes that provide blockchain-based information services to the public, and (2) institutions and organizations that provide technical support to such entities. “Blockchain information service users” under the Provisions refers to organizations and individuals that use blockchain information services. (Id.)

The Provisions notably require blockchain information service providers to authenticate the identity of the users on the basis of their organization codes, ID card numbers, or mobile phone numbers. The service providers must not provide services to any users who do not perform the identity authentication. (Id. art. 8.)

The Provisions prohibit blockchain information service providers and users from using the services to engage in activities prohibited by laws or administrative regulations that endanger national security, disturb social order, or infringe the legitimate rights and interests of others. They must not generate, copy, publish, or disseminate information content prohibited by laws and administrative regulations. (Id. art. 10.)

Blockchain information service providers are required to censor postings and store user data. When users violate laws, regulations, or service agreements, service providers must take measures such as issuing warnings to the users, restricting their accounts’ features, or deregistering their accounts. Service providers must also take relevant measures to prevent the spread of “illegal information content.” (Id. art. 16.) They are also required to record user posts and logs for no less than six months and to provide such records upon the request of law enforcement agencies. (Id. art. 17.)

The Provisions are the first set of rules specifically targeting blockchain technology, which is the basis for cryptocurrencies such as Bitcoin and “is known for providing anonymity for users.” (Zheping Huang, China Requires Blockchain-Based Information Service Providers to Register Users Using Real Names, Censor Postings And Store User Data, SOUTH CHINA MORNING POST (Oct. 22, 2018).)