… 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.
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: as these tightened, 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.
Bitcoin value traded at Huobi and BTC China declined nearly 20% to around 23,000 yuan as of Friday night. Bitcfinex remains the most active and popular bitcoin exchange in the world.
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