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September 15, 2017

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Bitcoin platform to stop trading end-September

One of the biggest Bitcoin exchanges in China and the world announced yesterday that it would stop all trading at the end of this month following new Chinese government regulations clamping down on crypto-currencies.

The international value of Bitcoin has plunged in recent days amid speculation that the Chinese authorities will shut down the trading platforms following last week’s ban on initial coin offerings.

BTCC — China’s No. 2 Bitcoin platform by volume and the world’s third-largest — said that “after carefully considering” the announcement by Chinese regulators, it will “stop all trading” on September 30. It has already stopped registering new users.

But foreigners can still use its services in overseas markets, Shanghai-based BTCC said in a statement.

China last week announced a ban on individuals and organizations raising money through ICOs — a form of fundraising in which technology startups issue their own digital coins, or “tokens,” to investors to access funds.

The central bank, the securities and banking regulators and other government departments said in a statement that ICO is “a kind of unauthorized and illegal public fundraising.”

Following the decision, the National Internet Finance Association of China said on Wednesday that there was “no legal basis for platforms which engage in the trading of various forms of ‘virtual currencies.’”

The association, which was created by the central bank, warned on its website that such currencies are “increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling and illegal fundraising.”

The crypto-currency sank late yesterday.

According to the Bitcoin Price Index, which offers an average of the various global platforms, the currency had plunged as low as US$3,640 by yesterday evening after peaking at an all-time high of around US$4,359 on Tuesday.

Beijing-based Huobi, one of the country’s top-three Bitcoin trading platforms, said it hadn’t received any orders about stopping trading but will “obey government laws and try its best to protect clients’ assets.”

Digital coins, including Bitcoin, are often described as finance innovation tools but they operate in a generally unregulated environment.

Last week, Caixin magazine reported Chinese regulators are considering closing trading platforms of crypto-currencies, after banning trading of ICOs.

A top industry regulator echoed worries about the unregulated market.

Jiang Yang, vice chairman of the China Securities Regulatory Commission, said at a forum held in Beijing yesterday that China should be more cautious on innovation in the finance industry to prevent fiscal and systematic risks.

At the start of 2017, the total value of all crypto-currencies was US$17.5 billion.

In August, it surged to US$120 billion — worth as much as Goldman and RBS put together, said CoinMarketCap.


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