Bitcoin value drops as China cracks down on cryptocurrencies

  • 16/09/2017
Bitcoin
China is cracking down on the cryptocurrency business. Photo credit: Reuters

Chinese authorities have ordered Beijing-based cryptocurrency exchanges to stop trading and immediately notify users of their closure, signalling a widening crackdown by authorities on the industry to contain financial risks.

Exchanges were also told to stop allowing new user registrations as of Friday, according to a government notice. The notice was signed by the Beijing city group in charge of overseeing internet finance risks and circulated online.

Platforms should also tell the government by Wednesday, September 20 how they will allow users to make withdrawals in a risk-free manner and handle funds to make sure investor interests are protected, according to the notice, which was also reported by state newspaper Securities Times.

"All trading exchanges must by midnight of September 15 publish a notice to make clear when they will stop all cryptocurrency trading and announce a stop to new user registrations," the government notice said.

China is cracking down on the cryptocurrency business to try to limit risks as consumers pile into a highly speculative market that has grown rapidly this year. It was reported this week that China planned to shut down the exchanges.

Shanghai-based BTCChina, a major Chinese bitcoin exchange, said on Thursday it would stop all trading from September 30, citing tightening regulation. Smaller Chinese bitcoin exchanges ViaBTC, YoBTC and Yunbi on Friday announced similar closures.

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Beijing-based platforms OkCoin and Huobi, which are among China's biggest exchanges, said late on Friday that they planned to stop yuan-based trading by October 31.

Early on Saturday AEST, BTC's price was down 7.63 percent at 19,797.00 yuan ($3800).

The bitcoin price was down 5 percent at US$3071 on US exchange Bitstamp.

Reuters

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