Top Chinese bitcoin exchange shuts down

BEIJING: One of the biggest bitcoin exchanges in China and the world announced Thursday that it would stop all trading following new Chinese government regulations clamping down on crypto-currencies.

The international value of bitcoin has plunged in recent days amid speculation that the Chinese authorities will shut down the trading platforms following last week’s ban on initial coin offerings.

BTCC — China’s second bitcoin platform in terms of volume and the world’s third largest — said on its Twitter account that “after carefully considering” the announcement by Chinese regulators, it will “stop all trading” on September 30.

The Chinese central bank’s announcement last week meant that Chinese firms would no longer be able to issue electronic currency units to raise funds.

Following the decision, the National Internet Finance Association of China said Wednesday that there was “no legal basis for platforms which engage in the trading of various forms of ‘virtual currencies'”.

The association, which was created by the central bank, warned on its website that such currencies are “increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising”.

The crypto-currency sank late Thursday.

According to the Bitcoin Price Index, which offers an average of the various global platforms, the currency had plunged as low as $3,640 by Thursday evening after peaking at an all-time high of around $4,359 on Tuesday.

The Chinese central bank’s move last week was seen as a way for Beijing to gain control over crypto-currencies, which are created using blockchain technology and are sold and bought online without any government regulation.

In an attempt to halt capital flight overseas and clean up its financial system, Beijing began early this year to tighten controls on bitcoin trading platforms by restricting, in particular, transactions considered excessively speculative.

The two main Chinese platforms, BTCC and Okcoin which operate in yuan, account for 22 percent of the world trade in bitcoins, says a report. – Agencies