Tencents WeChat announced Tuesday that it will temporarily suspend registration for new users in China while it complies with applicable laws and regulations. This is the latest Chinese company to be subject to regulatory scrutiny in the largest internet market.
Tencent stated in a social media posting that it is updating its security technology to comply with all applicable laws and regulations. While this process is underway, registration for new Weixin (WeChats Chinese App) personal and official accounts was temporarily suspended.
After the upgrade is completed, registration services will be restored. This is expected to happen in early August.
Although it is not clear what law WeChat is citing in its announcement, the move comes amid a wide crackdown by Chinese regulators on tech companies. In recent weeks, the crackdown has resulted in billions in market cap being lost by Chinese companies. This has also impacted many prominent global investors like SoftBank.
WeChat, a super-app that operates in China, is making this the first time it has ever had to make such a move in over a decade. Weixin offers a messaging service and also lets users make online payments.
(In other markets it is a different story. Donald Trump had signed an order banning transactions with TikTok or WeChat in the U.S.A last year. These actions were rescinded by President Joe Biden last month and replaced.
Analysts believe that the Chinese government is worried about the rise of tech companies in China and the privacy of its citizens' data.
China's cybersecurity regulator had ordered Didi, the ride-hailing app giant, to stop signing up new customers earlier this month. This was days after Didis' initial public offering of $4.4 billion on the New York Stock Exchange. The regulator claimed that Didis's app, Didis, was illegally collecting personal data from its Chinese customers.