China Issues Total Ban on Cryptocurrency Trading: Bitcoin Falls to Multi-Month Low
For months now Chinese authorities have been moving against cryptocurrency activity. In September they banned ICOs and domestic exchanges. Last month they moved against websites and applications which offered exchange-like functionality. Now they are implementing a total ban on cryptocurrency trading and investment within the country.
The People’s Bank of China has announced that it will block Chinese access to all ICO and foreign cryptocurrency exchange websites.
“To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs,” said Financial News, a People’s Bank of China-affiliated news agency.
September’s ban was apparently not sufficiently effective in curbing crypto-activity. “ICOs and virtual currency trading did not completely withdraw from China following the official ban”, said the Financial News, claiming that “many people turned to overseas platforms to continue participating in virtual currency transactions”.
Many Chinese entrepreneurs and cryptocurrency operations have relocated to nearby territories with more relaxed regulation, such as Japan or Hong Kong. However, they have continued to raise funds from mainland Chinese investors. It is this kind of activity that the people’s Bank of China is hoping to finally eliminate. In their view, all cryptocurrency activity is inherently destabilising so action is needed to “prevent financial risks and safeguard financial stability.”
Although nothing has been announced officially, it seems that authorities are also cracking down on advertising. Last week Chinese social media giants Baidu and Weibo stopped showing adverts for cryptocurrency products and services, and searches for “Bitcoin” or “ICO” now return no sponsored results.
The cryptocurrency markets have reacted badly to the news and 2018 continued its move from bad to worse for cryptocurrency investors. Bitcoin traded below $7,000 for the first time since November. At time of writing the price is $7,180.
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