BTCChina, the country’s first bitcoin exchange, gives up on the cryptocurrency amid Beijing’s tightening crackdown
- BTCChina, which once ran the country’s largest cryptocurrency exchange, said it has ‘completely exited from bitcoin-related businesses’
- Beijing’s latest bitcoin crackdown has forced mining operations across the country to close and other businesses to distance themselves from cryptocurrencies
The company said on Thursday that it has “completely exited from bitcoin-related businesses” and that it sold its stake in the Singapore-registered bitcoin exchange ZG.com to an unidentified foundation in Dubai in May 2020.
BTCChina was founded in 2011 by Huang Xiaoyu and Yang Linke, who helped push the idea of bitcoin to Chinese investors when it was still a foreign concept to most people in the country, including the government. The company once claimed that it accounted for 80 per cent of the world’s cryptocurrency trading, but it was later caught up in the China’s various cryptocurrency crackdowns. In 2017, the company said it would stop trading cryptocurrencies following the government’s ban at the time.
In its latest announcement, BTCChina said it was exiting the bitcoin business “in response to the [Chinese] government’s policy”, which set off a new crackdown that has already forced the closure of many of the country’s mining operations.
Beijing regards cryptocurrencies as a threat to financial stability, as it allows people to circumvent the government’s strict capital controls. There are also concerns about price volatility. The latest crackdown came after the price of bitcoin increased sevenfold over the course of a year and then plummeted by more than 40 per cent in one month.
During earlier bouts of bitcoin exuberance, Yang became one of the most influential industry figures in China.
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Yang, who ran sauna and massage lounges before he started BTCChina, was so happy about his wealth from cryptocurrency that he donated funds to build a stone bridge in the small rural village where he was born on the outskirts of Wenzhou, Zhejiang province. The railings of the bridge were engraved with introductions to different cryptocurrencies, according to a biographical video published in 2019 by The Paper, a state-affiliated Chinese news website.
BTCChina eventually decided to sell its exchange operation, which was acquired by an unnamed Hong Kong-based blockchain investment fund in January 2018, and continued to operate as normal for crypto investors under the name BTCC – except for anyone with a Chinese IP address.
BTCC’s continued operation fanned speculation that Yang, 36, still controlled the exchange, which the company denied. BTCChina issued a statement in July 2020 saying it had no relationship with BTCC.
Yang was not an employee, investor or beneficiary of BTCC in Hong Kong, the statement said. The company also said Yang was not an employee, executive, director or shareholder of ZG.com.
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Neither BTCChina nor ZG.com responded to requests for comment.
On Tuesday, BTCC posted a statement trying to reassure investors that the exchange was not affected by the crackdown in mainland China. BTCC is immune from Beijing’s latest ban on processing bitcoin-related transactions, the company said, adding that money going “in and out” of the platform remained normal.
“BTCC is not impacted for now because BTCC doesn’t provide trading of cryptocurrencies, but derivatives of cryptocurrencies,” the company said in the statement.
