Chinese authorities may be moving towards widespread repression against Bitcoin, including peer-to-peer (P2P) exchanges and over-the-counter (OTC) trading platforms. Using the Great firewall to block IP addresses, access to external bitcoin exchanges could be blocked and Bitcoin’s network of transactions could be disrupted within the country. Bitcoin miners are also concerned that their operations may be restricted.
Chinese officials said they had have reportedly informed several industry executives at a closed-door meeting in Beijing on Friday that they are “moving toward a broad clampdown on bitcoin trading,” according to the Wall Street Journal on Monday. Citing people familiar with the matter, the news outlet wrote:
“Regulators have decided on a comprehensive ban on channels for the buying or selling of the virtual currency in China that goes beyond plans to shut commercial bitcoin exchanges,” “Until last week, many entrepreneurs in China’s Bitcoin circles had thought authorities might shut down only commercial trading activity while tolerating peer-to-peer, or over-the-counter, bitcoin platforms, which enable buyers and sellers to find each other and trade directly.”
This news came after Beijing had ordered the closure of the bitcoin exchanges, which many have already complied with, including Btcchina, Huobi and Okcoin. Following the regulatory crackdown, bitcoin’s prices initially fell but have since recovered. China’s trading volume has dropped to the fourth position globally, as traders migrated business to OTC markets and exchanges outside of China. Trading volumes on Localbitcoins subsequently spiked exponentially, news.Bitcoin.com recently reported.
Last week, Bitkan suspended its OTC cryptocurrency trading service. The suspension, which began on September 14, affects the platform’s mobile app and site for BTC and BCC OTC services, the company announced.
The Wall Street Journal also said Monday that, according to “people familiar with the matter”:
“A broader clampdown will likely include blocking mainland access to websites of foreign bitcoin exchanges such as Coinbase in the U.S. and Bitfinex in Hong Kong.”
This agrees with a document which surfaced last week detailing how the Chinese government will try to block access to bitcoin exchanges and other important services that reside outside of the country. While the document is unverified, Sina said that it is authentic.
The bitcoin exchanges specifically named in the document include Coinbase, Okcoin, Bithumb, Bittrex, Coinone, Bitflyer, Bitstamp, Bitfinex, Poloniex, Kraken, Bitmex, and Localbitcoins.
While China’s bitcoin trading volume has fallen, its mining market share remains the largest in the world. “With the tightening of the monitoring policy of bitcoin, the mining business is also affected,” a 21st Century Economic News reporter wrote on Tuesday. A Shenyang mining equipment dealer told the reporter that mining equipment does not sell well right now because of the current panicked market sentiment. With the domestic bitcoin trading platforms closing down and the prospect of overseas trading channels blocked, “mining business will be hit hard,” he said.
Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and/or services. This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest.