China Plans to Shut Down Bitcoin Exchanges

Violet Tucker
September 12, 2017

The price of Bitcoin dropped sharply after news about a crackdown on virtual currency exchanges emerged on Friday. Trading volumes by Chinese bitcoin trading platforms are close to reaching all-time highs and in terms of daily trading volume, China has already surpassed the US.

Still, the ban is not exactly a ban on trading Bitcoin entirely.

Chinese authorities have reportedly made a decision to ban the trading of Bitcoin and other cryptocurrencies on domestic exchanges, the Wall Street Journal reports.

Notably, the ban has yet to be officially announced in China, according to the Wall Street Journal. When the initial report of Caixin was released, the Chinese bitcoin market crashed, bringing the price of bitcoin down to the $4,000 region. But, in contrary, bitcoin has recovered to over $4,200 today, with the Chinese bitcoin exchange market demonstrating high trading volumes and USA investors moving bitcoin price upwards. The nation is taking aggressive action to regulate Bitcoin and protect itself from a potential cryptocurrency bubble.

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Officials had previously considered using anti-money laundering rules to have more control over bitcoin exchanges but it seems now that they have chosen to take a stronger approach as virtual currencies have skyrocketed in value over the past year. They allow companies to issue "tokens", similar to shares.

China's largest bitcoin exchanges are still awaiting clarification from the government following more media reports that Beijing is planning to ban trading of virtual currencies on domestic exchanges, but markets were largely subdued on Monday.

The bigger risk for global bitcoin traders may be the massive rally in prices, according to McFarland.

The source further went on to say that this ban is specifically targeted at "unauthorized trading at virtual currency exchanges", and not the blockchain technology itself. But, as bitcoin mining and blockchain research firm BitFury Vice Chairman George Kikvadze explained, the impact of the Chinese government's announcement was minimal and the bitcoin market recovered within hours.

Other reports by Guamnewswatch

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