The entire cryptocurrency world got a rather surprising scare last week. Rumor had it the Chinese central bank would be introducing even more Bitcoin regulation. Some sources mentioned the government was looking to restrict access to foreign exchanges altogether. It now turns out this was a pure hoax, as someone had hacked into the central bank’s mailbox to issue a fake email. It’s a very worrisome development, as it hints not only at clear cryptocurrency manipulation but also at weak email security for China’s central bank.
Cryptocurrency Manipulation Hoax Unveiled
It is not uncommon in the world of cryptocurrency to see attempts at manipulating markets. Especially when it comes to hints at regulatory measures, the Bitcoin and altcoin markets tend to be rather twitchy. Just last week, we saw all cryptocurrencies suffer losses of 35% and higher due to fake news coming out of China. According to some local sources, the central bank was planning to block access to foreign cryptocurrency exchanges. Such a decision would have spooked all markets and crippled the cryptocurrency industry as a whole.
The recent press invitation sent out by China’s central bank has turned out to be a complete hoax. The institution never sent out such an invitation, nor does it have plans to further crack down on Bitcoin trading in Hong Kong. Instead, it seems a group of hackers successfully breached the mail server of the central bank to send out this fake information. As the details were subsequently mailed to the US media, it is evident most of them picked up on the “news” and assumed the new measure was genuine.
According to the email, the PBoC and the Hong Kong Monetary Authority would introduce additional anti-money laundering regulations in Beijing. This “decision” would extend the country’s cryptocurrency regulation to all virtual currency services and activities of individuals and businesses. It did not take long before both the PBoC and the HMA acknowledged they never sent out such an email, nor do they plan to make any such regulatory decisions regarding Bitcoin.
Considering that this email was sent from the PBoC domain name and an official mailbox, an internal investigation is more than warranted. The person who owns this mailbox is an official working at the Hefei branch of the central bank. He claims to have had nothing to do with this email, and says he didn’t send any information to US press agencies. It seems safe to assume his email account was compromised by a third party, although few details are known right now regarding such a breach. With proper security measures in place, a hack would be pretty much impossible.
Unfortunately, it is not the first time we’ve seen the spreading of fake news regarding cryptocurrency regulation. While it is the first time the PBoC has been compromised in this regard, it may very well be the beginning of what is yet to come. Stealing cryptocurrencies no longer seems sufficient for a lot of hackers. Thus, they have attempted to cripple the industry as a whole. Another possibility is that this was another state-sponsored hacking attempt by a foreign country, although the investigation will have to point out who is to blame for this email breach.
Thankfully, most cryptocurrency markets are recovering as we speak. This latest scare knocked off nearly US$150 billion from the total cryptocurrency market cap in the span of a few days. Most of those losses were recovered on Wednesday, but there is still plenty of work to be done. It is unclear why regulatory measures in China – fake or not – would even impact the markets in any way. China has become a non-factor in the world of cryptocurrency, thanks to its negative stance toward this industry.