China cracks down hard on Bitcoin exchanges

China cracks down hard on Bitcoin exchanges

The news was initially taken as a disallowance of trading between virtual currencies and legal tender in China.... however, it was further revealed that the intent is to target unauthorized trading at any of the virtual currencies. The country accounts for about 23 percent of bitcoin trades and is also home to numerous world's biggest bitcoin miners, who confirm transactions in the digital currency.

While governments around the world regulate and closely watch IPOs, ICOs are not regulated, and they have been used by many companies to raise funds without a guarantee that the token issuer will re-buy tokens and not run away with most of the funds.

One of bitcoin's biggest influencers, Crypto Compare's Charles Hayter, said to CNBC recently that for China "nothing is ever certain" when it comes to cryptocurrencies.

"Trading volume would definitely shrink, " said Zhou Shuoji, Beijing-based founding partner at FBG Capital, which invests in cryptocurrencies, Bloomberg reported.

Bitcoin has jumped about 600 per cent in U.S. dollar terms over the past year, part of a broad surge in virtual currencies that has fuelled concerns of a bubble. The People's Bank of China has done trial runs of its own prototype cryptocurrency, taking it a step closer to being the first major central bank to issue digital money. "All of these things suggest a longer term process of tightening scrutiny of activities that aren't in the normal sort of monetary realm". "Just 15 percent of global bitcoin trade against Japan, Korea, and the U.S., which equal to 80 percent", said Kikvadze.

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Leading bitcoin exchanges in China such as OKCoin, BTCC and Huobi have expressed their skepticism toward the initial report of a bitcoin exchange ban, because they have strictly complied with every request and regulation established by PBoC and local financial regulators.

China has been casting its shadow on the price of cryptocurrencies in the past week.

The media are reporting that China is now drafting a new resolution which will see Bitcoin exchanges banned in the country.

China's influence on global markets is not restricted to just traditional currencies, with the country's biggest exchanges accounting for a fifth of all transactions over the course of the past month.

According to the The Wall Street Journal, bitcoin exchanges are now being clamped down on, with no trading to be done within Chinese borders. "So you will get quite substantial pullbacks at some point".

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