[2017-09-15] Chinese Bitcoin Exchanges Face Stricter Regulation and Licensure

[nickbelski]

Over the past week, bitcoiners everywhere have been focused on the speculative news of China ‘banning’ bitcoin and wondering if the stories were true. According to recent reports from local media and the country’s National Internet Finance Association (NIFA), bitcoin is not ‘illegal,’ but exchanges may face tighter regulatory supervision and might have to cease operations temporarily until they are licensed.

Bitcoin Exchanges May be Required to Procure a License 

Last week new.Bitcoin.com reported on rumors of China banning bitcoin, while cryptocurrency markets tumbled due to the negative news. Many reports from mainstream media detailed that the digital currency was deemed ‘illegal’ in China, even though there was no confirmation of this from regulatory officials. Bitcoin proponents also saw tweets from Litecoin creator, Charlie Lee, stating that China “finally banned bitcoin exchanges,” but the tweet was later deleted.

Later Bitmain’s Jihan Wu explained to his Twitter followers that “China has not banned bitcoin.” Further Mr. Wu detailed that exchanges needed licensure and the same thing would happen in the U.S. if trading platforms didn’t have a license.

“None of the bitcoin exchanges in China have licenses that are required for order book exchange,” explains Mr. Wu via Twitter. “Such law is older than bitcoin. Because some establish in China that Bitcoin exchanges need to stop operations right now does not mean that they cannot open again once with a license.”

        "If a bitcoin exchange operates inside U.S. without a license for years and later is asked to stop operating. Is the U.S banning bitcoin?"

So-Called “Currency” Trading Platforms Are Not Legally Established

Following the rumors and hearsay, China’s National Internet Finance Association (NIFA) announced that exchanges dealing with cryptocurrency and ICOs had received many warnings in the past. NIFA states that any exchange operating in China currently has “no legal” authority to operate a virtual currency business at the moment.

“So-called “currency” trading platforms in China are not legally established,” reveals NIFA’s statement on September 13.

China’s regional media sources also confirm that exchanges will face stricter regulatory scrutiny, but claim that bitcoin is not banned nationwide. According to the reports, the next step will be strengthening cryptocurrency exchange supervision while also emphasizing that ICOs are still forbidden. One report explains regulators are merely “removing fraudulent projects without actual content.” However, even though some local reports state bitcoin exchanges will face more regulatory challenges they still may have to cease operations in the meantime.

The Possibility of Cryptocurrency Exchanges Shutting Down is Still There

An anonymous source told The Wall Street Journal that domestic cryptocurrency trading platforms will soon be closed down. The sources explained that regulatory officials were cryptic detailing the situation and would not reveal when the alleged exchange shut down would happen. “Too much disorder was naturally a basic reason” to stop cryptocurrency operations explained the news outlets’ source.

For now, every major Chinese cryptocurrency exchange is still operating, and the public doesn’t know if they will have to close down. Moreover, if exchanges are asked to close, then the trading platforms may have to get licensed before resuming financial operations. Many speculators believe the news has been the primary factor tied to the bitcoin price drop over the past 24-hours.

https://news.bitcoin.com/chinese-bitcoin-exchanges-may-face-stricter-regulation-and-licensure/

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[Kemarit]

I remember that have already put a tighter regulations when PBoC caught some of the major Chinese exchanges doing fake volumes, they have been suspended and a new regulations have been laid out that's why they are able to resume operations and if  they are caught again, fines and closures will be dealt. So I don't know what round of regulations are being setup. Its now just KYC and AML but I think more consumer based protection. If this news is true then its likely that they can come back and operate. Let's wait and see how it goes. But since they are alot of FUD's coming from China, the price has already suffered and bloodbath is continuing for the past 1 week or so.

[Rahar02]

I think so, PBOC announced to halt withdrawal on 3 biggest exchanges back in the early of this year, in February.
I thought it was about the regulations regards fake volume, money laundering, foreign exchange management, payment and settlement. After few months later, those exchanges back in business, People could trade, buy and sell bitcoin in there, suddenly PBOC announced to shut down ICO platforms and exchanges may require a license? Than, what happens in few months ago? Lol
Maybe finally The Chinese government will ban bitcoin because they worried about capital flight, a good way to move money out of China.

[1Referee]

Maybe finally The Chinese government will ban bitcoin because they worried about capital flight, a good way to move money out of China.

If we look at how China operates, even in situations that aren't crypto related, it's safe to say that at some point, they will ban crypto in its entirity. I am fairly sure that this was already something they were planning to do, but just gave it more priority due to how crypto in general has grown recently. China bans everything that it sees as a potential threat, and a total crypto ban fits nicely in their long list of services, sites, etc, that they have banned. It won't take long before miners will have to halt their operations entirely, or be forced to move them to a different country. It's China's last trump card, because after this, there isn't much they can use against everyone who cares about Bitcoin and crypto.

[saenko]

I think so, PBOC announced to halt withdrawal on 3 biggest exchanges back in the early of this year, in February.
I thought it was about the regulations regards fake volume, money laundering, foreign exchange management, payment and settlement. After few months later, those exchanges back in business, People could trade, buy and sell bitcoin in there, suddenly PBOC announced to shut down ICO platforms and exchanges may require a license? Than, what happens in few months ago? Lol
Maybe finally The Chinese government will ban bitcoin because they worried about capital flight, a good way to move money out of China.

If the government prohibits the activity of exchanges, people will trade on exchanges that are registered in other countries. Bitcoin is impossible to stop. And all attempts at control are doomed to failure

[CryptoBry]

I am sure that soon (maybe by next year) Bitcoin exchanges can be again allowed in China under a strict laws and regulations. The government is aware of the tremendous opportunities available with cryptocurrencies but it can not allow disorder. They just need time to sort these things out. China can be back with a vengeance months from now.

[Slow death]

" Bitcoin Price Bounces Back $400 In Minutes As China Gives Huobi, Okcoin Extra Month "

this is the theme of many news channels

The Possibility of Cryptocurrency Exchanges Shutting Down is Still There

The exchanges are already closing.


" Announcement on closing ViaBTC exchange platform
2017-09-14 23:14:32
On September 4th, China's central bank together with six other departments released a public statement  on regulation policies and warning the risks of ICO projects. As a responsible cryptocurrency exchange platform, ViaBTC (www.viabtc.com) has made a serious decision to carry out the spirits of the policy - we will officially close the website www.viabtc.com for exchange business in Mainland China on September 30th. Before that we will complete processing of all withdrawal requests of CNY and cryptocurrency assets. ViaBTC mining pool (pool.viabtc.com) and cloud mining services will not be affected.

The arrangements are as follows:
Sept 25th: Closing of registration, asset deposits and all trading pairs
Sept 30th: Closing of website www.viabtc.com

Please make sure to withdraw all your assets including CNY and cryptocurrency before September 30th, after which ViaBTC website www.viabtc.com will be officially closed in Mainland China.

Notice: Due to bank system time limits, CNY withdrawals on non-work days will be postponed for processing till the next work day. Cryptocurrency withdrawals won’t be affected by this. If you haven’t found a reliable wallet for your coins yet, we recommend you to withdraw your crypto assets to our mining pool (pool.viabtc.com) wallet. We will guarantee 100% safety of all your assets. 

Since the launch in June this year, ViaBTC exchange platform has been providing services for nearly 100,000 global users. We appreciate all your support and trust in us. Thank you for being there with ViaBTC.

https://www.viabtc.com/announcement/detail?id=11

 "


 some exchanges will close in a month