PBOC signals rattle Chinese bitcoin exchanges

Leading operators including BTC China to skip global conference amid regulatory uncertainties

PUBLISHED : Wednesday, 07 May, 2014, 1:08am
UPDATED : Wednesday, 07 May, 2014, 1:08am

Several of China's largest bitcoin exchanges pulled out of a global conference in Beijing this weekend after the central bank signalled further curbs on speculative trading of the virtual currency.

BTC China said it and four other bitcoin trading platforms agreed to adopt stricter practices such as halting margin trading and short selling. They also agreed to not participate in bitcoin marketing conferences and gatherings, according to a statement posted yesterday on the website of BTC China, the oldest of the nation's bitcoin operators.

BTC China, OKCoin and Huobi.com would no longer attend the Global Bitcoin Summit on Saturday as planned, BTC China chief executive Bobby Lee said yesterday. Speakers from the exchanges who were to appear at the conference were taken off an updated schedule sent to media yesterday by organisers.

"We got together with a few exchanges and decided to co-ordinate some efforts in light of the perceived clampdown of the central bank," Lee said. "We've decided to stay more low-key and skip out of the conference."

The People's Bank of China began a crackdown on bitcoin in December, barring financial institutions and payment companies from dealing in the crypto-currency amid concern it could be used to launder money or skirt capital controls. Since then, mainland banks have closed the accounts of online trading platforms used to transfer money to bitcoin trading accounts.

A spokesman for the PBOC's media relations department declined to comment yesterday.

Bitcoin prices were volatile yesterday, falling to as low as 2,590.02 yuan (HK$3,260) on BTC China after the exchange operator said it would stop accepting bank transfers of funds to customer trading accounts. They rebounded to as high as 2,720 yuan.

Prices plunged almost 10 per cent on March 27 after Caixin reported that the PBOC ordered banks and payment companies to close accounts used to transfer money to bitcoin trading accounts at the exchanges. Bank of China announced on its website on April 30 that it was banning the use of its bank accounts to charge trading accounts.

The number of Chinese exchange users had decreased as increasingly strict policies caused concern, Leon Li, founder of Beijing-based trading platform Huobi.com said last month.

About 600 people would probably take part in China's first international bitcoin conference, according to Hitters Xu, one of the organisers.

Zennon Kapron, managing director of financial consultancy Kapronasia, said: "The future of bitcoin in China is a bit unclear with all of the regulations and the actions that PBOC has taken against the exchanges."