Beijing is increasingly hostile to Bitcoin
Illustration by Alex Castro / The Verge
China plans to shut down domestic Bitcoin exchanges, anonymous sources told The Wall Street Journal today. The sources said that regulators weren’t giving a clear message on when the shutdown would occur. One regulator told an exchange that the decision had already been made, while another said the decision might take a few months. In response to the news, the Bitcoin prices have dipped to a low of $4,108, according to CoinDesk.
China is home to vast and lucrative cryptocurrency mining operations for both Bitcoin, Ethereum, and other cryptocoins. Three Chinese exchanges — Bitfinex, OkCoin, and BTCC — made up over 45 percent of the global market share over the last 30 days, according to Bitcoinity.org. Bitcoin’s growing popularity in China may have caused the government to begin to perceive it as a threat to local currency, especially as Chinese investors bought up bitcoin and bet against the yuan last year.
The anonymous source cites “too much disorder” as the reason for the alleged shutdown, echoing the Chinese central bank’s words last week criticizing ICOs for disrupting the country’s financial order. China banned initial coin offerings last week as an unapproved and illegal form of public financing.
Many are skeptical of the rumored shutdown, including Bobby Lee, co-founder and CEO of BTCC. He tweeted a poll on September 8th, asking whether followers thought the shutdown news was fake or real, so far, 83 percent have voted that they believe the news is fake. On the same day, BTCC tweeted from its main handle @YourBTCC that the exchange was operating normally.
#China regulators have finally decided to officially #ban all #Bitcoin exchanges &, trading platforms.#True? or #FakeNews?
OkCoin responded with an emailed statement: “‘Til now we haven’t informed by any authorities about closing BTC exchanges, if that happens we will show notifications on our website in no time. Even if that ‘s the case, we would be running offline trading for users, and your balance of coins in your account will be absolutely safe.”
This isn’t the first time China’s flexed its regulatory muscle on Bitcoin. Back in 2013, China banned the cryptocurrency from all banks and financial institutions, but left exchanges alone. The People’s Bank of China did not respond to comment in time for publication, and neither did major Chinese Bitcoin exchanges Bitfinex, BTCC, and Huobi.
Update Sept. 11th, 4:07PM ET: This article was updated with a statement from OkCoin.
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