Chi­nese bit­coin ex­changes await clar­i­fi­ca­tion on trad­ing ban re­ports

The Sun (Malaysia) - - SUNBIZ -

SHANG­HAI: China’s largest bit­coin ex­changes said yes­ter­day they were still await­ing clar­i­fi­ca­tion from the govern­ment fol­low­ing more me­dia re­ports that Bei­jing was plan­ning to ban trad­ing of vir­tual cur­ren­cies on do­mes­tic ex­changes.

Spokeswomen for the OkCoin and Huobi plat­forms told Reuters they had no in­for­ma­tion to share fol­low­ing a re­port by Chi­nese fi­nan­cial pub­li­ca­tion Caixin that sent the price of bit­coin down 6.6% on Fri­day.

Caixin re­ported that China was plan­ning to shut down lo­cal cryp­tocur­rency ex­changes. Yes­ter­day, Bloomberg and The Wall Street Jour­nal is­sued sim­i­lar re­ports, say­ing that China was draft­ing a plan to ban com­mer­cial trad­ing of all vir­tual cur­ren­cies. Reuters was un­able to con­firm the re­ports.

BTC China, also one of China’s three largest ex­changes, and China’s cen­tral bank did not im­me­di­ately re­spond to Reuters’ re­quests for com­ment.

Bit­coin was trad­ing lower by around 1.6% at US$4,160 (RM17,430) on the Bit­stamp plat­form yes­ter­day. On Sept 2, it hit a record high of nearly US$5,000.

China has boomed as a cryp­tocur­rency trad­ing venue in re­cent years as its do­mes­tic ex­changes had pre­vi­ously al­lowed users to con­duct trades for free, at­tract­ing in­vestors and spec­u­la­tors who boosted de­mand and en­cour­ag­ing vol­umes.

How­ever, reg­u­la­tors started tak­ing a closer look at the in­dus­try in Jan­uary this year and have since rolled out a se­ries of rules for the in­dus­try in­clud­ing forc­ing ex­changes to slap on trad­ing fees and re­quir­ing them to strengthen over­sight of cus­tomers’ iden­ti­ties.

The lat­est me­dia re­ports fol­low China’s move last week to ban so­called “ini­tial coin of­fer­ings,” or the prac­tice of cre­at­ing and sell­ing dig­i­tal cur­ren­cies or to­kens to in­vestors in or­der to fi­nance start-up projects.

Xue Hongyan, direc­tor of the Sun­ing Fi­nan­cial Re­search In­sti­tute, the re­search arm of one of China’s largest fin­tech ser­vice providers, said in an ar­ti­cle posted on­line that the lat­est re­ports sug­gested that the reg­u­la­tions were not aimed at the vir­tual cur­ren­cies them­selves, but rather trad­ing of them.

“The rea­son is not dif­fi­cult to un­der­stand. The vir­tual cur­rency it­self is not the prob­lem, but the il­le­gal be­hav­iours that the vir­tual cur­ren­cies en­able are where the prob­lems lie,” he said.

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