China cracks down on illegal crypto exchanges, Bitcoin drops by $500

China might be banning Bitcoin exchanges

A source with knowledge of the policy confirmed to Reuters that China planned to ban exchanges that allowed virtual currency trading.

Last week, the Chinese central bank, the People's Bank of China (PBoC), temporarily suspended all initial coin offerings (ICOs) and officially declared ICO as an illegal fundraising method.

Bitcoin's value recently dropped by 7.3 percent, to around $4,200, following reports that Chinese regulators forced virtual currency exchanges to close.

BTC China, the second-largest exchange, has responded to the crackdown with its own statement.

The country accounts for about 23 per cent of bitcoin trades globally and is also home to numerous world's biggest bitcoin miners, who confirm transactions in the digital currency.

"Trading volume would definitely shrink, " said Zhou Shuoji, Beijing-based founding partner at FBG Capital, which invests in cryptocurrencies, Bloomberg reported.




Bitcoin took another huge blow, this time from China, after reports suggest authorities will order domestic Bitcoin exchanges to shut down. "Old users will definitely still trade, but the entry threshold for new users is now very high".

Given that the Chinese government and its financial regulators had not released any abrupt regulations on bitcoin, Ethereum and the cryptocurrency market in general, bitcoin price was on an ideal trajectory towards achieving the interim targets of various prominent financial analysts including Max Keiser, who have altered their short-term price target from $5,000 to $10,000.

"There has been a general tightening of the screw on regulating financial and monetary conditions", said Mark McFarland, chief economist at Union Bancaire Privee SA HK in Hong Kong.

At one point, exchanges in the country accounted for more than 90 per cent of the world's bitcoin transactions.

Chinese financial officials said previous year they plan to crack down on cryptocurrencies because Bitcoin and other virtual currencies were often used to finance terrorist groups and launder money out of the country.

Coinmama lets you buy bitcoins with your credit card or cash.

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