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Bitcoin

ViaBTC to launch bitcoin exchange overseas after Beijing bans trading at home

PUBLISHED : Friday, 22 September, 2017, 12:55pm
UPDATED : Friday, 22 September, 2017, 10:47pm

Chinese bitcoin exchange ViaBTC plans to open an overseas platform after the government ordered the closure of all cryptocurrency exchanges on the mainland.

“A third of our customers come from outside China, and I believe these overseas users will continue to use the ViaBTC platform, so we can still provide value,” said Yang Haipo, chief executive of the exchange during a global blockchain event in Hong Kong on Thursday.

He said there was no time frame yet to relaunch the platform abroad, and urged current users to withdraw their assets before the company stops its domestic services on September 25.

“We have enough liquidity to support all of our customers’ withdrawals,” he said.

The Shenzhen-based firm announced a week ago that it would shut down its Chinese exchange business by the end of the month. Other mainland platforms such as BTCChina, OkCoin and Huobi have also said they will cease trading following Beijing’s orders.

A third of our customers come from outside China, so we can still provide value
Yang Haipo, chief executive, ViaBTC

China’s crackdown on platforms that enable trading of cryptocurrencies like bitcoin follows a ban early this month on initial coin offerings (ICOs), in which digital currencies are sold to raise capital. Regulators deemed ICOs to be an illegal form of fundraising.

Bitcoin prices have soared over the past 12 months, jumping from about US$595 to an all-time high of US$4,950 on September 1. Since China announced its ICO ban and ordered the closure of exchange platforms, bitcoin prices have plunged, trading at about US$3,663 early on Friday.

Their volatility, the decentralised nature of their administration and the amount of investor speculation they attract have made digital currencies the focus of intense scepticism by authorities and industry bodies in China. The National Internet Finance Association called them “tools for criminal activities of money laundering, drug deals, smuggling and illegal fundraising”.

Why has China declared war on bitcoin and digital currencies?

Although ViaBTC can no longer provide trading services at home, it still runs a bitcoin mining pool, where users share resources and computer processing power over a network to create bitcoin – a process known as mining – which are then split among them.

“We have yet to receive notice that we need to halt mining, so [mining] is operating as usual,” he said.

Yang believes that despite the ban on trading, cryptocurrencies like bitcoin cannot be completely blocked from the country.

“The bitcoin network is fully distributed, even if there is the [great firewall], users can easily bypass this using methods like VPN,” he said, referring to a virtual private network.

“Synchronising bitcoin information is easy, as long as one [computer] in China is synchronised on the bitcoin network, every other [bitcoin] computer will also obtain the full information on the network.”