Bitcoin sinks as China likely to order exchange halt

Beijing’s move comes amid a broad clampdown on financial risk

Bitcoin tumbled, heading for its worst week since January 2015, after people familiar with the matter said China aims to stop exchange trading of cryptocurrencies by the end of September.

Regional Chinese regulators were notified of the plan by a central bank-led group overseeing internet finance risks, said the people, who asked not to be named because the information is private. Bitcoin dropped 9.3 per cent to $3,077.55 (Dh11,303.5) at 9:22am in London, extending this week’s decline to 28 per cent.

The notice suggests Chinese policymakers will move quickly with their most farreaching measure to rein in the growth of cryptocurrencies. China’s crackdown, which includes a ban on initial coin offerings announced last week, has fuelled an abrupt reversal in bitcoin after the digital currency soared more than 700 per cent in the 12 months through August.

The digital currency tumbled on Thursday after BTC China, one of the country’s largest cryptocurrency venues, said it would stop handling trades by month-end. Rivals OKCoin and Huobi said they haven’t received any regulatory orders to halt.

The cryptocurrency ban will only apply to trading on exchanges, people familiar with the matter told Bloomberg on Monday.

Beijing’s move comes amid a broad clampdown on financial risk in the run-up to a Communist Party leadership reshuffle next month.