Business

On tight deadline, Chinese bitcoin exchanges start shutting down

On tight deadline, Chinese bitcoin exchanges start shutting down

The Wall Street Journal reported on Monday that the Chinese government and the country's central bank meant to shut down bitcoin exchanges. The bitcoin price index on trade website Coindesk slid below $3,000 for the first time in six weeks.

Charlie Lee, the creator of litecoin, one of the largest cryptocurrencies by market cap, tweeted that OKCoin and Huobi were set to meet with regulators on Friday.

Shanghai-based BTCChina, a major Chinese bitcoin exchange, said on Thursday it would stop all trading from September 30, citing tightening regulation, while smaller Chinese bitcoin exchanges ViaBTC, YoBTC and Yunbi on Friday also announced similar closures. Just over a week after bitcoin hit a fresh all-time high of almost $5,000, the two bits of news from China have prompted a two-stage wave of price declines. However, according to Yicai, on September 13th, the China Internet Finance Association issued a risk warning, saying that all of the so-called " virtual currency" trading platform in China lacks a legal basis.

Recent news from China has impacted the price of Bitcoin sending it on a downward spiral.

While many developed countries in the West and Asia allow digital currencies to be accepted as payments and have rules about taxation of gains, some emerging countries view them as an illegal form of payment.

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Wednesday, Bitcoin dove by more than 10%, as investors sold the cryptocurrency after a warning by JPMorgan (NYSE:JPM) Chief Executive Jamie Dimon that it "is a fraud" and will eventually "blow up". It was reported last week by Caixin that China was contemplating shutting down cryptocurrency exchange trading, and further confirmation of that order arrived today.

The price of bitcoin plummeted another 9 percent Thursday, while rival currency ether dropped 12 percent.

Arthur Levitt, former commissioner of the U.S. Securities and Exchange Commission, said that just because the cryptocurrency markets are wildly speculative at the moment doesn't mean cryptocurrencies are going away.

The announcement by the exchange BTTC followed the news a fortnight ago that the Chinese authorities had banned initial coin offerings.

This statement has added more fuel to the existing clouds of uncertainty which are surrounding the world's biggest crypto currency.