China shutting down Bitcoin exchanges

China is moving forward with plans to shut down Bitcoin exchanges in the country, starting with trading platforms in key cities.

All Bitcoin exchanges in Beijing and Shanghai have been ordered to submit plans for winding down their operations by 20 September.

The move follows the Chinese central bank’s decision to ban initial coin offerings in early September.

Top exchange BTCC said it would stop trading at the end of the month.

Chinese authorities decided to ban digital currencies as part of a plan for reducing the country’s financial risks.

A website set up by the Chinese central bank warned that cryptocurrencies are “increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising”.

Strict instructions

According to a document leaked online by users on the social network Weibo that was seen by Coindesk, Chinese regulators ordered all cryptocurrency exchanges in Beijing to stop registering new user registration by midnight local time on 15 September, and to notify users publicly when they formally close.

All exchanges are required to send regulators a detailed “risk-free” plan of how they intend to exit the market before 18:30 local time on Wednesday 20 September.

The regulator also ordered the exchanges to submit DVDs containing all user trading and holding data to the local authorities.

Shareholders, controllers, executives, and core financial and technical staff of exchanges are also required to remain in Beijing during the shutdown and to co-operate fully with authorities.

Being cautious

Chinese Yuan and Bitcoin: Chinese regulators have issued strict instructions on how Bitcoin exchanges should dismantle their operations © Getty Images Chinese regulators have issued strict instructions on how Bitcoin exchanges should dismantle their operations

“China is shutting the exchanges down for good reasons – I think it’s right they’re being cautious at this time,” Paul Armstrong, an emerging technology adviser and author of the book Disruptive Technologies, told the BBC.

“Bitcoin is by proxy unregulated and peer-to-peer, it’s a very volatile currency.”

However, Mr Armstrong does not think that this will be the end of Bitcoin in China for good.

“They’re shutting it down for now, but it doesn’t mean that in six months or so they won’t create new Bitcoin regulations like Japan and Australia did,” he said.

“All the other countries have digital currencies and are making important decisions about it, so it doesn’t make sense for China to dismiss it out of hand.”

He added that China’s decision could prompt Chinese investors to seek alternative options to digital currencies, such as moving out of the country and operating exchanges or Bitcoin mining pools in other regions.

Comments

comments

Filed in: Mainstream Bitcoin Tags: ,

You might like:

South Korea Legitimizes Blockchain Industry With Major New Classification Standards South Korea Legitimizes Blockchain Industry With Major New Classification Standards
The History of Tezos: The Infamous ICO Trying to Rebound Amidst Lawsuits and Disputes The History of Tezos: The Infamous ICO Trying to Rebound Amidst Lawsuits and Disputes
BIS Chief Bashes Cryptocurrency Again in Scathing Review of Its ‘Failure’ as Money BIS Chief Bashes Cryptocurrency Again in Scathing Review of Its ‘Failure’ as Money
Former Jefferies Asia CEO to Lead $1 Billion EOS VC Arm Former Jefferies Asia CEO to Lead $1 Billion EOS VC Arm
IBM Signs $740 Million Deal With Australian Gov’t to Use Blockchain for Data Security IBM Signs $740 Million Deal With Australian Gov’t to Use Blockchain for Data Security
Deadline for Implementing Indian Central Bank’s Ban on Crypto Dealings Ends Deadline for Implementing Indian Central Bank’s Ban on Crypto Dealings Ends
Collectable Crypto Game Introduces Personalized Artist-Designed Avatars Collectable Crypto Game Introduces Personalized Artist-Designed Avatars
Immutability in Doubt: Do We Need to Protect Blockchain Data? Immutability in Doubt: Do We Need to Protect Blockchain Data?
© 0876 Virtual Mining Bitcoin News. All rights reserved. XHTML / CSS Valid.