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Compliance Chinese style with wechat and bitcoin

January 31, 2018

So I do a lot of OTC p2p bitcoin transactions with Mainland China, and it turns out that I do all of my transactions on wechat.  People might find that odd.  Why are you transacting on wechat if it is being monitored by the Chinese government.

The funny thing is that I do all of my OTC p2p CNY bitcoin transactions on wechat *because* is it being monitored by the Chinese government.  The thing about the Chinese government is that their first reaction if you are doing something they don’t like is not to send you to jail.  The first thing they will do is to “ask nicely” for you to stop.  Someone, I may get a message from wechat administration asking me nicely to stop doing what I’m doing, and at that point I’ll stop, but the fact that wechat is being monitored by the Chinese government gives them the ability to see what I’m doing, and to object to it if they want.

But you need multiple channels.  Suppose for example, I was moving bitcoin for the Dalai Lama.  Now the Dalai Lama is not Beijing’s favourite person, so if I were to talk about that I’d use telegram or signal.  Now I’m sure that Beijing could crack that if they wanted to, but it’s not something I’d want to immediately broadcast.

It’s part of a weird regulatory system.  I’m sure that everything that I do on google and whatsapp is being monitored by the NSA, but under US law, the US government has to pretend not to be listening in, and they can’t use that information for anything else.  Whereas in the case of wechat, the Chinese government is not hiding what it is doing, and they are under no legal restrictions as to what they can do with that information.  It turns out that this makes it easier to set up a financial services company.  In the case, of the US, they have to put in new mechanisms to do compliance on bitcoin which can get extremely expensive.  In the case of China, because they are already monitoring chat for other reasons, you can use that mechanism for compliance monitoring.


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