Reports: China To Close Its Domestic Crypto Exchanges

Blockchain, Crime, FinTech, Innovation, Investing, News, Regulation | September 11, 2017 By:

Reports are multiplying that China is about to shut down its domestic cryptocurrency exchanges. The move follows a decision by regulators last week to ban initial coin offerings (ICO).

On Monday, Bloomberg News and the Wall Street Journal followed an initial report by China’s Caixin news service that regulators have ordered a halt to all digital currency trading platforms in the country. As with the ICO shut-down, the problem of “risk” was cited as the reason. No official proclamations have been issued by the Chinese government or regulators, although some exchanges are already taking steps and indicating they have been contacted.

OKCoin, Huobi and BTC China are among the platforms that will be shuttered. However, the closures may be a prelude to the government itself getting more deeply involved in cryptocurrency. The Caixin story quoted an anonymous source that stated “unauthorized” trading is the target of the clamp-down, rather than cryptocurrency and its underlying blockchain technology.

China is in the midst of a crackdown on capital outflows, which experts see as stemming from a cooling economy and fears that the central government is losing control of its monetary authority. Reports have previously surfaced that the central government was considering creating its own cryptocurrency.

China now has slightly less than 30 percent of the global bitcoin market, with OKCoin, Huobi and BTC China accounting for 60 percent of bitcoin trading in the country. It once controlled more than 90 percent of the market in bitcoin’s early days.

BTC China, the second-largest exchange, has responded to the crackdown with its own statement.

“If the [Caixin] report is accurate, BTCChina will stop all BTC/CNY trading, and change its business model to become an information service provider for private, one-on-one digital asset trading,” the exchange said in a statement quoted in Spidren.