China cybersecurity regulator to continue crackdown on illegal financial services online

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Cyberspace Administration of China says it has taken action against a number of accounts on social media platforms

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The Cyberspace Administration of China’s headquarters in Beijing. Photo: Baidu

Cao Li

Published: 3:44pm, 12 Dec 2024

China’s top cybersecurity regulator vowed to continue its crackdown on illegal financial services online, from unauthorised stock recommendations to unlicensed financial intermediary services.

In a note published Wednesday, the Cyberspace Administration of China (CAC) said it has taken action against a batch of accounts on social media platforms including Douyin, Kuaishou, Weibo and WeChat that have engaged in illegal activities. It has also cleared content that is designed to drive traffic to financial schemes and increased penalties for websites and accounts that engage in unlicensed financial services.

Some accounts have exploited a recent increase in capital-market activity by sharing insights on stock trading, or using live streams, short videos, or posts to provide recommendations with high fees, the note said. This has led to investor losses.

The CAC said it will press forward with its efforts to crack down on such illegal activities and regulate the orderly dissemination of financial services.

China had more than 220 million individual investors at the end of last year, according to the China Securities Depository and Clearing Corp. As Chinese stocks rallied in recent months, following Beijing’s measures to boost the economy, the number of new accounts soared. For the Shanghai Stock Exchange alone, more than 6.8 million new accounts were opened in October.

Investors have bet on sectors from property to consumer goods, hoping Beijing would roll out stimulus packages to rescue these sectors. They also bet on stocks with names similar to the two candidates in the recent presidential election in the US.