China's 2nd Biggest Bitcoin Exchange Responds To Report Beijing Is Shutting All Virtual Exchanges

One day after Bitcoin crashed on a massive surge in volume, following a report in China's Caixin website that Chinese authorities plan to shut local Bitcoin exchanges....

... there is still far more confusion than clarity about what is really going on in China: so far there has been no official statement from either the PBOC or China's financial regulator, confirming or denying the report, which spooked millions of Chinese bitcoin (and ethereum and litecoin) holders into dumping their digital currencies. As a reminder, this is the gist of the Caixin report:

The central government’s office overseeing internet financial risks has ordered local authorities to shut down virtual exchanges trading digital currencies with the yuan, a source close to the office told Caixin. The order will affect major Bitcoin platforms such as OKCoin, Huobi and BTC China.

To be sure, it's not like a Chinese government bureaucracy to i) allow such a major leak and ii) not make a validating (or denying) statement over a day later.

The confusion was further exacerbated by the report's seeming contradictions, as in the same report that claimed Chinese Bitcoin exchanges would be halted, also said that the proposed regulation (which has yet to be unveiled) is not meant to be a crackdown on bitcoin itself or actual trading: "the source added that the crackdown targets unauthorized trading at virtual currency exchanges, rather than Bitcoin and the underlying blockchain technology."

So until we wait an official statement from Beijing, which risks the wrath of millions of bitcoin daytraders should it confirming the Caixin trial balloon, moments ago China's second biggest bitcoin exchange, BTC China issued the following statement in response to the Caixin report:

BTCChina Response to News Article On "Banning Bitcoin Exchanges"

 

We have received a large number of questions from customers following the publication of a news article by Caixin alleging that Chinese regulators would stop bitcoin trading

 

Our response is as follows:

 

  • BTCChina operates in strict accordance with Chinese regulations. If the Caixin report is accurate, we will continue acting in strict accordance with regulators, and continue protecting the safety of customers' funds.
  • The Caixin report says that regulators have not said bitcoin itself is illegal, and have not decided to prohibit private, one-on-one bitcoin transactions. If the 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.

 

Many people regard digital assets, of which bitcoin is the embodiment, as the necessary result of recent advances in internet technology and the largest scale practical application of blockchain technology. In additional, bitcoin's blockchain may have a far-reaching positive impact on the economy, becoming a foundational layer upon which other revolutionary software projects are based. We believe digital assets will have a far-reaching impact on the global economy.

 

BTCChina thanks you for your support, and will continue working to provide the best service for all customers.

 

BTCChina

 

Saturday, September 9th, 2017

What is notable about BTC China's response, aside from its promise to pivot its business model should Caixin's report be accurate, is that it appears that there has yet to be any official confirmation. Could someone be using the highly respected financial outlet as a fake "trial balloon" to push the price of bitcoin lower and load up on the cheap before the PBOC denies the late Friday report? We should know the answer by Monday.

Meanwhile, it is worth noting that while China was once the world’s largest Bitcoin marketplace, accounting for nearly 90% of global trading, this was followed by a series of crackdowns and regulations.

To be sure, Chinese exchange problems with the central bank are nothing new: at the start of this year, the People’s Bank of China launched an investigation into major bitcoin exchanges including Huobi, BTC China and OKCoin, and issued warnings about possible risks on their platforms. In response, Huobi and OKCoin ended zero-fee trading and margin-trading services, which let customers borrow yuan or bitcoin from the exchanges to boost their bets. The exchanges also suspended bitcoin withdrawals, and only reactivated them about three months ago.

These moves ended China’s dominance of the global bitcoin market, as measured by trading volume. As a result, China’s share in bitcoin trading has slid to less than a third of global trading. The three largest exchanges, OKCoin, BTC China and Huobi, account for 60% of Bitcoin trading in the country.

On Friday night, after the Caixin news, Bitcoin value traded at Huobi and BTC China declined nearly 20% to around 23,000 yuan. Bitfinex remains the most active and popular bitcoin exchange in the world.

Comments

bwh1214 Ramesees Sat, 09/09/2017 - 16:49 Permalink

There is no question that a government crackdown must be included in the calculation when deciding how much to invest in crypto currency, but considering the monetary and economic conditions we now face, zero is not the correct allocation to crypto currency.  No matter what biased silver dealers like Chris Duane would have you believe.What precious metals owners must understand is they are already hedged against the fall of crypto and thus should be taking on MORE risk in this new technology that has both real and bubble potential if the economic big one (Critical Mass Default) were ever to hit. Unfortunately people get caught up in the dogma of precious metals (though the correct allocation is far from zero) or their defense mechanisms and sour grapes causes them to want to “fight crypto” instead of doing a fair and honest assessment of its potential.  Here is my video response to Chris Duane’s assertion that you should not own any crypto currency:Duane Challenge Accepted, and a Wager 

In reply to by Ramesees

dasein211 max2205 Sat, 09/09/2017 - 16:24 Permalink

I trade and own in cold storage. China has done this before to the advantage of Chinese buyers. Only sellers are stupid enough to think that China will make Bitcoin illegal.... because technically they can't. If you think this wasn't planned by the chigov then there is no hope for you as a trader. I'll be buying all dips. And I still own gold and silver. I'm agnostic when it comes to making money on these assists.

In reply to by max2205

OpenThePodBayDoorHAL dasein211 Sat, 09/09/2017 - 23:18 Permalink

I love people who own Bitcoin because "it's the great new internet money", and then they store it in cold storage. The guys who really know how to store cold Bitcoin are Xapo, they store it 60 feet underground on a server that has never once connected to the internet.Um, uh...then riddle me this: how is it possible for this to be "money"?It can be a thing that goes up...because it's going up. But the great new internet money it is not.

In reply to by dasein211

Hongcha Ramesees Sat, 09/09/2017 - 20:37 Permalink

Hong Kong is under P.R.C. rule.  The red flag flies above the chrysanthemum.You BTC holders are whistling past the graveyard.  The Party can shut it down Monday morning and attach a death penalty to anyone found transacting in any way.  And in case you think they can't find them, guess again.

In reply to by Ramesees

hmmmstrange Sat, 09/09/2017 - 16:21 Permalink

The only reason China had the most trade volume was because all the Chinese exchanges were zero trade fee exchanges. As soon as they started charging trading fees the volume dropped 99%.

debtor of last… Sat, 09/09/2017 - 17:14 Permalink

Until the SGE oil business is fully implemented, we don't want the blockchain undermining our current system.

The LBMA as well as the SGE will support crypto currency trading as of tomorrow, all features available.

Go short, go long, ding, dang, dong.

Golden Phoenix Sat, 09/09/2017 - 18:21 Permalink

Centralized exchanges are not required to trade cryptocurrencies or even fiat. Cryptocurrencies with contractual features such as Ethereum fulfill all the necessary requirements to create an exchange including automatic escrow. Multiple decentralized alternatives have already been built and more are incoming. They would be as successful at stopping that as they have been at stopping people trading pirated movies over distributed Tor based systems.This is why the head of Fidelity recently said when her staff started studying cryptocurrencies they realized their industry is replaceable. And that's probably why they started mining bitcoin on the office computers.

MontgomeryScott Sat, 09/09/2017 - 18:23 Permalink

Regarding BITCOIN:I'll be posting this to cross-link to the OTHER story on ZH:http://www.zerohedge.com/news/2017-09-09/were-just-trying-feed-our-fami… I'm going through the various scenarios in my mind ("Meanwhile, it is worth noting that while China was once the world’s largest Bitcoin marketplace, accounting for nearly 90% of global trading"); for example. The attraction for those within the WESTERN banking system was that it was SUPPOSEDLY led by somebody named 'SATOSHI' (he's 'friendly', because,, well, "Bank of Japan". I suppose THAT is the REAL definition of the 'Asian Pivot' that was discussed so much in those 'think-tanks'...).Of the 1.3 BILLION people in China, how many are 'priveledged members' of the OFFICIAL regime (the totalitarian Socialist/Communist People's Liberation Army)? A fucking 'virtual currency' that promises the WORLD while you live in a mud hut, working for SLAVE WAGES, seems to be the PERFECT distraction (it earns NOTHING, isn't TANGIBLE, isn't even within the scope of REALITY, can't be held, touched, smelled, felt, or seen; and relies SOLELY on the electric grid for it's supposed 'VALUE'; made up of ENCODED ones and zeroes).It's a WET-DREAM (SHIT-CON), you know.When the power goes out and the internet connection stops; in Houston or Pensacola, do you think you can take your 'Bitcoin' wallet down to the local Lowe's and get a case of bottled water, or fuel up at the local gas station on the way out of town in the face or aftermath of a hurricane?

"We are two people trying to solve our lives and those of our families. We did not expect to get as much information as we did, nor do we want to affect any citizen. But we need to monetize the information as soon as possible.”

          The hackers have now made a ransom demand, stating on a Darkweb site that they will delete the data for a ransom payment of  600  BTC,  worth approximately $2.6 million.      The demand said that if they do not receive the funds from Equifax by September 15th, they will publicize the data."What a SHITSTORM of BULLSHIT!SCENARIO 1: The 'internet' is REALLY 'ANONYMOUS', and there is NO 'META-DATA' that would leave 'BREADCRUMBS' regarding the 'ANONYMOUS' hackers; AND they are FULLY CONFIDENT that they will 'get away' with the 'crime', Scot-free (hence, emboldening the 'public perception' that 'BITCOIN' really IS 'SAFE').The average ZH reader isn't ready yet for the OTHER scenarios, I suppose.https://www.bibliotecapleyades.net/sociopolitica/esp_sociopol_FEMA09.ht… a REALLY, REALLY expanded video of the song (but the person posting buys in to the LIE of the 'no-planes' scenario at the WTC. There WERE planes at the WTC complex [Shanksville was a 'shoot-down' with a six-square-mile debris field, and the PENTAGON was an OBVIOUS 'CRUISE' missile], but just not the ones you were led to believe there were). The REST of the video images seem to be generally correct:https://www.youtube.com/watch?v=VhddPnxDWvIFucking NWO 'military' and 'intelligence' service plants really LIKE supporting the CHICOM regime (and 'BITCOIN'). A DERIVITAVE of a DERIVATIVE... The VALUELESS, UNBACKED USD is always used to price this two-dimensional fantasy construct... If you need me, I'll be in my quarters studying technical manuals.Scott out. 

Hope Copy Sat, 09/09/2017 - 18:26 Permalink

The legal aspects have to be examined..  If the exchange is only assisting foe a fee, it is not actually part of the trade, but privi to the trade with 'no harm' and all the reporting requirements.. Ding, Ding, Ding....  the alarm goes off..

illuminatus (not verified) Sat, 09/09/2017 - 18:58 Permalink

When people fear governmeant it is called tyranny. When government fears the people it's called democracy. I know what I'm living under.

adr Sat, 09/09/2017 - 19:59 Permalink

Bitconnect says I can earn up to 40% monthly with zero risk. WOW, ZERO RISK!!! ZERO RISK. Where do I sign away my life's savings l? 

Exponere Mendaces Sun, 09/10/2017 - 04:21 Permalink

Guess who was right about the Chinese.You got punked, ZH.But keep pushing the gold and EMP narrative... any day now... (you'll get your check for all those ads in the clickbait titles you post).

whatisthat Sun, 09/10/2017 - 08:06 Permalink

I would observe bitcoin is an electronic Ponzi scam to enable collection of participants soft and hard assets through exchange manipulation and extortion by institutions and governments ....good luck.

Nomad Trader Sun, 09/10/2017 - 15:09 Permalink

Just wondering - does Bitcoin have a yield? Or is it by nature a zero yield product? That might not appear to matter much in this  current  zirp world, but in a higher yield one, you'd come to remember how much it does. That's why I'm flat crypto.