Bitcoin Crashes 35% In China: Beijing To Shut All Local Exchanges By End Of September

Tyler Durden's picture

Update: Confirming the other speculation, that China would halt all cryptocurrency exchange, Yicai reports that it is not just BTC China: 

  • CHINA MAY SHUT ALL LOCAL BITCOIN EXCHANGES BY SEPT. END: YICAI

To which the response from the Bitcoin Association of Hong Kong is: "if China restricts growth in bitcoin" it will drive business to us"

* * *

Yuan-denominated Bitcoin has crashed as much as 25% 35% in Chinese trading, plunging from 25,000 yuan to as a low of 16,000 on local exchanges BTCChina (and as low as 20,000 on OKCoin), following confirmation of last week's Caixin report that Beijing would stop cryptocurrency exchange trading. China's second largest exchange, BTC China, said that it would halt all trading on the platform beginning September 30, launching a liquidation panic.

In a statement released on Weibo, BTC China said that it would immediately stops accepting new account registrations on BTCChina Exchange. The decision was made after “carefully considering” Chinese regulatory bodies’ Sept. 4 announcement on preventing risks associated with token fundraising. A google-translated version of the statement:

China will stop all trading business on September 30th

 

Dear Bitcoal Chinese users: According to the September 4 issue of the "People's Bank of China Central Office of the Ministry of Industry and Information Technology Ministry of Industry and Commerce, China Banking Regulatory Commission, China Securities Regulatory Commission on the prevention and treatment of the risk of the issuance of the currency," the spirit of the document, adhering to the protection of investment risks, the maximum protection of users

 

The principle of interest, Bit Coin Chinese team by careful discussion, is to make the following decision:

 

1. Bit currency China's digital asset trading platform today to stop the registration of new users;

 

2. September 30, 2017 Digital asset trading platform will stop all trading business.

 

Beitou China's pool (pool) and other business will not be affected, continue to normal operation.

We apologize for the inconvenience. If you have any questions, please contact support@btcchina.com.

And on Twitter:

The immediate result was a sharp plunge in the CNY-denominated price of bitcoin on exchanges like BTC China and OKCoin:

While China no longer dominates cryptocurrency trading - it accounted for nearly 90% of all trading in late 2016 before Beijing launched a series of measures to limit participaton - and is now responsible for less than 40% of global volumes, the Chinese selloff has spooked global markets, pushing bitcoin sharply lower on international exchanges as well like Coinbase, where it was trading at approximately $3,600 last. 

A breakdown of global bitcoin exchanges by volume is shown below:

Also notable: as of this moment, China-denominated bitcoin is trading at about 17,000 yuan or just under US$2,500, indicating there is a nearly 30% arb between Chinese and offshore trading.

This isn’t the first time the bitcoin market in China has come under regulatory scrutiny. In early February, major exchanges suspended withdrawals of bitcoin and stepped up their scrutiny of clients after meeting with the central bank.

Emil Chan, vice-president of the Hong Kong Blockchain Society, said it would be difficult for regulators to outlaw bitcoin trading altogether. “There is no option to restrict cross-border sales of bitcoin. It is a smarter move to maintain the operation of the local exchanges if the central bank’s goal is to minimise the outflow of yuan.”

Still, the virtual currency is up more than six times from a year ago, with some participants convinced the bitcoin market is in a bubble. “In fact, the market was too hot. The action taken is an effective action to cool down the global cryptocurrency market,” said Chan.

Meanwhile, Leonhard Weese, president of the Bitcoin Association of Hong Kong, said if China continues to toughen up on regulations to restrict growth in bitcoin, it may drive the business to the city.

“People in China will be more careful about marketing these events, and a lot of that marketing activity will come to Hong Kong in the form of conferences and communities,” said Weese.

It remains to be seen if Chinese bitcoin fans will simply switch to other OTC/bilateral forms of trading, or simply take their trading to neighboring Japan and South Korea which remain eager advocates of trading in the crypto space.

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Dirty Bumn's picture

HAHAHA!! KEEP BUYING CRYPTOS STUPID!!!

Burnbright's picture

That is my problem with bit coin. It isn't really a medium of exchange as much as it is a speculation stock in something that I can't find a way to value. 

I don't think anyone should be hindering the progression of bitcoin, and certainly cheerleading actions taken against it by the goldbug crowd is disheartening. Goldbugs should be pro-freedom and nothing less. Because gold is the ultimate financial and thus personal freedom.

OpenThePodBayDoorHAL's picture

What do you mean, it's the great new internet money!

First you take out your Nano USB wallet (storing BTC keypairs on bare metal is the only safe way to go). Then you transfer some of your BTC to your phone's Mycellium wallet (be sure and check you don't have any key loggers on your phone first or your cool new internet money will disappear forever). 

You're ready to go! Now go find a merchant that accepts Bitcoin (good luck). The merchant can convert the price of the goods to Bitcoin. You log into your wallet and transfer the BTC to the merchant. Don't forget to add a fee ($4 if you can wait a few days for the transaction to confirm, $26 if you only want to wait a few hours).

You can go next door to the cafe while you wait for the transaction to be confirmed. Oops the price fell 5% in 30 minutes, you just paid 5% more for the goods at the merchant (hopefully you put in the right amount because transctions are irreversible). But you're using the great new internet money!

Bitcoin: because future! 

TeamDepends's picture

Was talking to the haters, not you friend.  Did not junk you.

MANvsMACHINE's picture

Why isn't the #1 exchange in china shutting down? Why just #2?

Perhaps there are other issues and they are using the 'government' as cover? Last I heard, which was a few days ago, none of the exchanges heard anything official from the Chinese government. All of sudden, BTC China is making these moves and no other exchanges are? Odd to say the least.

Gobble D. Goop's picture

Could it be, they want to back the Yuan in gold, not crypto?

Bay of Pigs's picture

"while China no longer dominates cryptocurrency trading - it accounted for nearly 90% of all trading in late 2016 before Beijing launched a series of measures to limit participaton - and is now responsible for less than 40% of global volumes"

Just wondering if these numbers are accurate? I've read some claims here by BTC supporters claiming China trade was already dead before any of this happened.

Burltron's picture

All good brotha. I fail to understand the anger people hold as to others investments. I want to see every true patron of ZH make coin.  

tmosley's picture

Peanutz don't like it when people own cryptos.

Truly a pathetic set of people.

Bay of Pigs's picture

Why do you care who owns BTC, other crypto's, gold, silver, stocks, bonds, RE, or anything else?

Get a grip. Your constant whining here is childish and pointless.

tmosley's picture

You are projecting. I don't downvote people when they say they own gold. Peanutz like you downvoted a guy simply for making a statement: "I own crypto." Stop being so hypocritical.

malek's picture

It's not projection if he makes a good case why the other person (you) is like that...

tmosley's picture

Nah, you are just so consumed by cognitive dissonance you can't perceive your own hypocrisy. 

malek's picture

Now that's a nice case of projection, fact-free accusations out of the blue!

(Feel free to point out where exactly I show cognitive dissonance or hypocrisy.)

tmosley's picture

Read the thread.

But you won't see it, because you are consumed by cognitive dissonance. 

malek's picture

Point me to it,
where something in the thread makes me a hypocrite when I point out you're projecting while BoP is not.

Games Without Frontiers's picture

Agreed, whatever hatred of BTC anyone might have should be far eclipsed by the hatred of the chokehold that central bankers have on this earth.

Crash Overide's picture

Jamie Dimon and his pals want crypto gone because they own the money game and don't like competition, especially competition they can't control?

When governments and central banks push harder to stop crypto's as they grasp at straws to save their dying fiat debt slave system you will see adaptation and innovation like never before, you can't stop what's coming.

How is the war on drugs going?

How did probation work out again?

 

How has the constant attack on the 2nd amendment working out?

 

If the people have the power they become irrelevant in every way, BIG banks and corrupt governments ARE the problem and they control the fake money, do the math.

Herd Redirection Committee's picture

I agree with the Buckminster Fuller philosophy that the way to change things is to replace them, and render them obsolete.

But to me, cryptos in their current form are just too similar to fiat currency printed out of thin air by central banks.  Its basically saying "It was wrong when they did it, now another group can do it!"  Now if that switches to "Now everyone can do it" then the argument can be made that it is a just way of replacing the bankster's fiat printing machine. 

Basically cryptos will have to work as 'Social Credit' was intended to.  There will be cryptos issued to every household (annually for e.g.), as a method to introduce new currency into the system (instead of the current method of having banksters lend to their cronies, to introduce new currency into the system).

tmosley's picture

Understand that cryptos are a recombining of tally sticks and free banking with a modern, digital twist.

The point is to get rid of the banks arbitrary power to devalue everyone else's currency. It handles this quite well. No-one can create more bitcoins, but they can create their own coin if they need to for some reason. If that reason is persuasive, the new coin will gain value. No built in theft like in the current system, just market selection.

Herd Redirection Committee's picture

Well, the first crypto that is built along the lines of 'Social Credit' is the one I will support, but it will also not make anyone filthy rich (although I do believe it would increase everyone's prosperity, except for the ultra-wealthy).

The key is to take away the power of banks to create fiat out of thin air.  The way to do that, IMO, is to have new currency created and put in the hands of all individuals, equally. 

fulliautomatix's picture

The opportunity is there for all individuals - who have access to electronic storage devices. Not perfect, but pretty good.

malek's picture

>No-one can create more bitcoins

...except for forks.
But you can't fork gold.

Ignant Bastad's picture

that'd be too logically consistent for many on this forum...besides IIRC don't a lot of folks here believe that China is somehow going to come to their rescue and save them from the evil western banking system...

Donald J. Trump's picture

The haters here on zh do exactly what you think they should, except they know a ponzi when they see one.  That's why they run from Bitcoin.  Introduce a cryptocurrency that is backed by something, such as gold, and it would embraced.

tmosley's picture

>Trust someone to keep gold for you

No.

fockewulf190's picture

Because if you don't, they will harvest your organs.

dumbhandle's picture

The Chines genes with spirit were killed off by Mao. Stock is now compliant.

BaBaBouy's picture

I think the JPM warnings are a prelude to Actual Actions by the US Admin...

Y'all have been warned, it won't be pretty...

 

mtl4's picture

Read my comment again, sorry can't lump me in the gold bug camp.

tmosley's picture

It wasn't a reply to you. It was a comment in the first chain.

mtl4's picture

My bad, no worries.

tmosley's picture

Yes, it's like in you picture, and like it was in ancient Rome. When some reatrd burns down their own property (as China has done, apparantly), then they sell it to you at a huge discount. That is the source of the term "fire sale". This is a fire sale on Bitcoin. 

fiftybagger's picture

And we find out that Jamie Dooshbag Dimon is on the same side as the Chicoms.  Thanks Bitcoin for showing us the true evil.

Dirty Bumn's picture

Hahaha!! keep buying cryptos STUPID.....

GUS100CORRINA's picture

Bitcoin Crashes 35% In China: Second Largest Exchange To Halt All Trading

My response: Everyone knows why CHINA is at the center of this event, correct?

IT IS BECAUSE THE DPNK ARE USING BITCOIN TO CIRCUMVENT SANCTIONS AND GET AROUND THE GOVERNMENT BANKING CONSTRAINTS, THIS DECLINE IN BITCOIN WILL TAKE THE WIND OUT OF THE SALES OF DPNK. 

tmosley's picture

Ah, an insightful comment. Food for thought.

If that is the case, the order will be rescended when the NoKo situation is resolved.

tmosley's picture

Peanutz don't like the idea of this order being recended (as such orders always are). They LOOOOOOVE communist oppression, so long as it is other people being oppressed!

erg's picture

There's no such word as recended. Is your addled mind trying to locate the word rescinded? And you call everyone else an idiot.

tmosley's picture

>Hurr durr you speeld uh wurd wrung hurrr

ElTerco's picture

A DPRK shutdown is potentially bad for BitCoin if the withdrawal of BitCoin actually damages DPRK. It would mean that shutting down BitCoin exchanges actually works as a way to stem illicit activities. That would cause government to want to shutter all BitCoin exchanges, just as a matter of principle.

tmosley's picture

No, it would just show that the bottleneck in NoKo financial transactions was in Chinese banks, which everyone already knew.

erg's picture

There's not such word as rescended.

Peacefulwarrior's picture

It seems after all the Us vs. Them dialogue, that governments in desperate need of revenue will do all they can to stop any encrypted currency from traversing the Planet until they can get their hands in the entire process. Blockchain in and of itself is brilliant

City_Of_Champyinz's picture

LOL you are such a pathetic one trick pony.  There is nothing stopping the governments of the world from killing off bitcoin.  They will either completely control 'cyber currencies' or destroy them.

RedDwarf's picture

Governments are not all powerful.  Statists like you who worship them as your God are ridiculous.  Sure a government can try to stop bitcoin, but all they will accomplish is going full totalitarian and becoming like North Korea.  States based upon centralized economies eventually fail.

City_Of_Champyinz's picture

Nice assumption douchebag.  I am the opposite of a statist, I just call them like I see them.  I do not hate bitcoin, I generally like the idea of getting the governments out of the currency business, but they are not going to let go of their power easily.