China Says All Cryptocurrency Transactions Are Illegal

China’s central bank said all cryptocurrency-related transactions are illegal and must be banned, sending the strongest signal yet on its determination to crack down on the industry.

All crypto currencies, including bitcoin and tether, are not fiat currency and cannot be circulated on the market, the People’s Bank of China said on its website. All crypto-related transactions, including services provided by offshore exchanges to domestic residents, are illicit financial activities, the PBOC said in the statement.

Bitcoin dropped as much as 4.5% on Friday. Ether also tumbled, along with other crypto-related stocks.

Meanwhile, the nation’s economic planning agency said it is an urgent task for China to root out crypto mining and the crackdown is important to meet carbon goals.

—Additional reporting by Jun Luo.