Bit­coin crashes af­ter Chi­nese ex­change halts trad­ing

Muscat Daily - - BUSINESS -

Sin­ga­pore - Bit­coin fell for five days, the long­est los­ing streak in more than a year, af­ter one of China’s largest on­line ex­changes said it would stop han­dling trades by the end of the month amid a govern­ment crack­down on cryp­tocur­ren­cies.

BTC China will im­me­di­ately stop ac­cept­ing new ac­count reg­is­tra­tions on its BTCChina Ex­change, Chief Ex­ec­u­tive Bobby Lee said Thurs­day in a tweet. The de­ci­sion was made af­ter “care­fully con­sid­er­ing” the Septem­ber 4 an­nounce­ment by Chi­nese reg­u­la­tors that out­lawed ini­tial coin of­fer­ings, he said.

The cryp­tocur­rency has slumped as much as 27 per cent since Septem­ber 7. It had risen more than four-fold this year amid greater ac­cep­tance of the blockchain tech­nol­ogy that un­der­pins the ex­change method, global po­lit­i­cal un­cer­tainty and in­creased in­ter­est in Asia.

China ac­counts for about 23 per cent of bit­coin trades and is also home to many of the world’s big­gest bit­coin min­ers, who use vast amounts of com­put­ing power to con­firm trans­ac­tions in the dig­i­tal cur­rency.

The com­mu­nist na­tion plans to ban trad­ing of bit­coin and other vir­tual cur­ren­cies on do­mes­tic ex­changes, Bloomberg News re­ported on Mon­day. The ban will only ap­ply to trad­ing of cryp­tocur­ren­cies on ex­changes, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter, who asked not to be named be­cause the in­for­ma­tion is pri­vate. Au­thor­i­ties don’t have plans to stop over-the-counter trans­ac­tions, the peo­ple said.

Shang­hai Fi­nan­cial Ser­vice Of­fice has also or­dered to close down bit­coin trad­ing plat­forms in the city, China Busi­ness News re­ported, cit­ing an uniden­ti­fied per- son.

While Bei­jing’s mo­ti­va­tion for the ex­change ban is un­clear, it comes amid a broad clam­p­down on fi­nan­cial risk in the run-up to a key Com­mu­nist Party lead­er­ship reshuf­fle next month. Bit­coin’s surge has fu­eled con­cerns of a bub­ble, prompt­ing skep­tics from JPMor­gan Chase & Co’s Jamie Di­mon to bil­lion­aire in­vestor Howard Marks to warn of a loom­ing crash.

Matt Roszak, the chair­man of Wash­ing­ton-based Cham­ber of Dig­i­tal Com­merce, an in­dus­try ad­vo­cacy group, and an in­vestor in BTC China, said he an­tic­i­pates that the ex­change will re­sume op­er­a­tions by the end of the year.

“That is the ex­pec­ta­tion based on months of dis­cus­sions - the tim­ing of which may be im­pacted a bit with the ICO phe­nom­e­non,” Roszak said in an email. “China is pre­par­ing to pro­vide li­cen­sure for less than a hand­ful of ex­changes as it grap­ples with the me­te­oric in­crease in cryp­tocur­rency trad­ing, and spec­u­la­tion on ICOs - li­cen­sure and en­gage­ment with govern­ment will help pro­pel this in­dus­try for­ward.”

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