The Chinese regulatory agencies have adopted a hardline stance against the country’s cryptocurrency exchanges. The increasing pressure on Bitcoin platforms to implement compliance measures has forced them to extend the ban on Bitcoin withdrawals indefinitely.
Three main bitcoin exchanges — BTCC, Huobi, and OKCoin simultaneously announced the extension of withdrawal ban in the country. In a previous announcement, they had expressed hopes of resuming normal operations, minus the leveraged trading and lending services by March 15, 2017. Now, with no definite timeline, the Chinese cryptocurrency market is going through uncertain times.
According to a report on one of the business news outlets, the exchanges are going to continue imposing the withdrawal ban, preventing users from accessing their own cryptocurrency until the regulators approve the internal compliance upgrades. The announcement had an effect on Bitcoin’s price, leading to an immediate fall in price, which later recovered after few hours.
The regulatory oversight in the Chinese Bitcoin market came into effect after numerous reports suggested an increased usage of Bitcoin among the population to skirt capital controls. These reports, combined with the country’s slowing economy and falling foreign reserves could have triggered the government agencies to crackdown on cryptocurrency platforms.
Before the crackdown, China was the world’s leading cryptocurrency market. Trading patterns and volumes in the Chinese market played a significant role in affecting the global Bitcoin price. However, following the withdrawal of leveraged trading and lending features, exchange platforms have started to impose trading fees, which has reduced the use of automated trading bots. All these factors, have weakened the country’s influence on Bitcoin price.
The cryptocurrency, driven by speculations and hopes of ETF approval has moved out of China’s sphere of influence. The fact that the Bitcoin price has increased to an all-time high while the Chinese community struggles to withdraw their cryptocurrency balance proves that the digital currency is quite capable of handling itself.
Ref: Bloomberg | Silicon Angle | Image: Shutterstock