Bitcoin crashes as Beijing orders cryptocurrency exchange shutdown

Bitcoin crashes as Beijing orders cryptocurrency exchange shutdown

China accounts for about 90 percent of all bitcoin trading on exchanges, and demand for the virtual currency was on the rise.

Matt Roszak, the chairman of Washington-based Chamber of Digital Commerce and an investor in BTC China, said he anticipates that the exchange will resume operations by year-end.

The price of bitcoin fell more than $500 today as market turmoil continues in the aftermath of Chinese exchange BTCC's trading stoppage announcement. "It will blow up". His comments came as Beijing cracks down on the cryptocurrency business to contain risks as consumers pile into a highly risky and speculative market that's grown rapidly this year.

The shutdown only affects Chinese traders, leaving worldwide exchange operations to continue as usual.

"On September 4th, China's central bank together with six other departments released a public statement on regulatory policies and warned of the risks of ICO projects", explains Viabtc's closure announcement.

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There have also been reports that China is preparing a wider crackdown on bitcoin trading amid concerns that it is being used for money laundering. The BTCC shutdown comes ahead of speculation that the Chinese government plans to completely ban exchanges. They are also of the view that the ICOs ban in China is the first step towards induction of some regulations. Two Chinese cryptocurrency exchanges, BTCChina and ViaBTC, have already announced they would close on that date, and trading platform OKex said on Friday it would remove three major Chinese exchanges-BTCChina, OKcoin and Huobi-from its index on september 30.

The exchange is the first major trading platform in the region to announce this decision. For those who believe in Bitcoin's long-term success, sudden drops in value present a potential buying opportunity.

All in all at that time China's central bank didn't make any official confirmation or denial, which was definitely good news. The bank said under national laws merchants in the country can not accept digital currencies as payment for goods and services, while cryptocurrency exchanges were also not allowed.

Litecoin creator Charlie Lee tweeted that the leading Chinese cryptocurrency exchanges OKCoin and Huobi are meeting with regulators on Friday, despite the exchanges themselves claimed that they had not been contacted by authotities.