Is China Banning Cryptocurrency Exchanges? - Everything We Know So Far
There’s been a series of bad news coming out of China over the last week resulting in an abrupt end to the recent bull market. Each time a new news item comes out there is a massive wave of sell offs and it’s been bad news after bad news lately. Ether was at a high of $400 before the bad news started coming out and now it’s hovering around $300.
The recent bad news pertains to new Chinese government regulations on cryptocurrencies. Last week, the government banned all ICO activity, forced completed (but not trading) ICOs to refund their proceeds, and stopped trading of most ICO tokens. When it felt like the dust has settled, another article claiming that the government was ready to ban all fiat-cryptocurrency trading dealt another blow to international cryptocurrency markets.
Although there has been no official confirmation of the trading ban, the news article came from Caixin, a large and reputable Chinese media corporation. There is also enough circumstantial evidence that the claim cannot be dismissed as bullshit. In the meantime, rumours and misinformation have been spread around as people wait for news from the Chinese government.
Below is a compilation of all significant news items on the situation so far. Hopefully this clears up some of the uncertainty floating around.
August 28th - Caixin releases an article claiming the Chinese government will ban ICOs soon
Caixin is a Beijing-based media group that provides financial and business news through a variety of mediums such as online content, TV programs, magazines, and conferences. Though not officially state-backed media, Caixin is a large and reputable news organization in China and one can assume it has close ties with authorities.
On August 28th, Caixin released an article warning that the Chinese government are preparing regulations on ICOs and may even ban them.
This warning was largely ignored as the ongoing cryptocurrency bull market continues. Ether was at around $370 on August 28th and climbed to a high of $400 on August 31st.
August 31st - ICO.info suspends operations
ICO.info is a Chinese ICO investment platform. The website picks ICOs to host and users can sign up and invest in them. They released an official statement on August 31st stating that they will voluntarily suspend operations.
This is the first major warning sign that something big is brewing in China. Following this announcement, there was a huge dip in Bitcoin and Ethereum prices.
September 3rd - ICOage suspends operations
ICOage, another Chinese ICO investment platform, released an official statement that they will be voluntarily suspending operations. Red flag #2. Cryptocurrency markets continued to fall after this announcement.
September 4th - People’s Bank of China releases an official notice to ban ICOs
The People’s Bank of China released an official notice calling for a suspension of all ICO activity in China. According to the notice, ICOs have given rise to speculation and “illegal financial activities” that have “disrupted the economic and financial order”.
The notice called for all planned and ongoing ICOs to be cancelled. ICOs that have completed but not begun trading needed to refund all proceeds and all cryptocurrency exchanges needed to stop trading ICO tokens.
The release of this notice resulted in a massive cryptocurrency selloff.
September 6th - Chinese cryptocurrency exchanges delist many ICO tokens including QTUM and NEO
In response to the PBoC notice released on September 4th, many Chinese cryptocurrency exchanges, including Yunbi, BTER, and Jubi, began delisting ICO tokens. QTUM and NEO were among the casualties.
September 6th - Chinese official claims on CCTV-13 that the ICO ban is temporary
September 8th - Caixin releases another article claiming the Chinese government will ban all fiat-cryptocurrency trading
Caixin released an article titled “China Steps Up Curbs on Virtual Currency Trading” and claimed that the news agency has learned from “a source close to regulators” that the government plans to halt all trading of cryptocurrencies with the yuan. “The order will affect major Bitcoin platforms such as OKCoin, Huobi and BTC China.” OKCoin, Huobi, and BTC China are the largest cryptocurrency exchanges in China and one of the largest in the world.
September 8th - People’s Daily’s English Twitter account seems to reiterate Caixin’s claim in an awkwardly worded tweet
According to Wikipedia, “the People’s Daily or Renmin Ribao is the biggest newspaper group in China. The paper is an official newspaper of the Chinese Communist Party”.
The People’s Daily’s English Twitter account tweeted out this statement:
Chinese supervisory authority has decided to close local virtual currency exchanges, involving “currency line”, “coins” and “Bitcoin China”.
This seems to be reiterating Caixin’s claim that the government is banning fiat-cryptocurrency trading.
September 8th - ViaBTC founder reiterates Caixin’s claim
ViaBTC’s founder, Haipo Yang, tweeted that “China will shutdown all exchanges.”
September 9th - OKCoin and BTC China announce they have not received any information from the government, operating normally
OKCoin released an official statement on the website in response to Caixin’s article. The exchange stated that it had not received any notice from regulators and cannot confirm the report. If the report is true, then the exchange will shut down yuan to cryptocurrency exchange and become a P2P platform for cryptocurrencies.
BTC China’s Twitter account also tweeted out a statement confirming that they are operating normal and have not received “any new directives from Chinese regulators”.
September 11th - Bitcoin and Ethereum prices rally in China
Bitcoin’s price rallied from a low of 21500¥ on September 10th on OKCoin to 25699¥ on September 11th. Ethereum’s price experienced a similar rally.
The rally could be a result of Chinese optimism that the government will not ban fiat-cryptocurrency trading or it could be a last minute buying of cryptocurrencies.
September 11th - Wall Street Journal releases an article reiterating Caixin’s claim on the fiat-cryptocurrency trading ban
The Wall Street Journal released an article claiming that Chinese authorities plan on shutting down domestic cryptocurrency exchanges. The article goes on to claim that the People’s Bank of China had “led a draft of instructions that would ban Chinese platforms from providing virtual currency trading services”. This information was apparently sourced from “people familiar with the matter”.
The Wall Street Journal reporter behind the article resides in Beijing and primarily focuses on Chinese business news.
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