[2017-09-22]How Shanghai Govt Came To Forcing All Bitcoin Trading to Stop

[aysha9872]

How Shanghai Govt Came To Forcing All Bitcoin Trading to Stop: The Insider Story

Sept. 22, The Paper news agency reported that the Chinese regulators not only banned the exchange between Bitcoin and other cryptocurrencies and the Chinese Yuan, but they also called for all trading of cryptocurrency to any fiat currency to end.

This carries the implication that all exchanges have effectively been banned.

Shanghai goes further

Furthermore, the regulators in Shanghai have asked for the top management of the exchanges, including the executives, directors, finance team and technical team members, to stay in Shanghai to cooperate for the clean-up activity.

Previously, the Beijing regulators still did not call for trading in all fiat currency to be stopped. However, it was noticed that on Sept. 15 both OKCoin and HuoBi first announced that all cryptocurrency trading in Chinese Yuan will end. The next day, both exchanges modified their announcements respectively to include a plan to end all cryptocurrency trading activities.

The main reason for closing down the exchanges, as authorities tell the public, is because Bitcoin price fluctuates greatly, it is risky and it can be a way for criminal activities to take place. Besides, Bitcoin trading platforms do not have a qualified regulatory system and won’t give sufficient protection to investors, regulators believe.

How the u-turn was happening

In May this year, when Bitcoin price went above RMB 8,000, PBOC arranged talks with the three largest crypto exchanges.

They allowed for the Bitcoin exchanges to handle issues regarding development on their own, so the clean-up activities were carried out correspondingly. Later on, the Bitcoin exchanges were instructed to charge trading fees, to prevent speculating activities, to stop financing services, to implement strict Know-Your-Customers (KYC) policies, to take measures to prevent money laundering and to report back to the regulation department in a timely manner.

In September this year,  the regulators called to end all forms of digital currency trading and to return the customer’s funds into accounts that can be audited.

An audit mechanism was then to be established to audit every account to prevent diversion or embezzlement of cryptocurrency funds. All Bitcoin exchanges were instructed to halt new accounts registration, to lower the number of investors and to plan to their own exits from cryptocurrency trading.

Strict supervision

When asked about the situation regarding ICO, a source with the regulators explained:

   “If a certain ICO’s sole purpose was to raise funds, it will be okay if the funds were returned to the investors, and the case is closed.But if the ICO was used as a way for money laundering, then it should be handled as how it is supposed to be doing just that.”

When asked about how the ICO funds return is being handled, the insider explained that most importantly, the platforms, project owners and investors can come to an agreement and the government’s responsibility is to urge and supervise the return of capital and to protect the rights of the investors.

Foreign platforms

‘For some projects, there are disagreements between the trading platforms and the investors. For example, some tokens were already trading on the exchanges, and the prices had increased from 1.5 cents to five cents, yet how much should be returned to the investors is not decided by the government. If the parties could not come to an agreement, they should take the legal approach to settle the case.’

When asked about government’s initiative to block access to all foreign platforms, the person informed that as cryptocurrency is a decentralized system, the regulators are having difficulties in the technical aspects. Thus they can only control from the movement of funds.

https://cointelegraph.com/news/how-shanghai-govt-came-to-forcing-all-bitcoin-trading-to-stop-the-insider-story

[TravelMug]

Whatever explanation someone gives, it boils down to one thing for me: They are threaten by bitcoin that's why they have to stopped before it consumed their financial establishment. We need to get the China hangover guys. As a communist nation, they do what they have to do. In return we have stood to the challenge and still we are here. We may have been broken, but we have recovered since the announcement coming from their government. And soon they will be irrelevant to us as if they did nothing for bitcoin. The only affected parties here are the Chinese casual traders and investors like most of us.

[vit05]

If the gov is auditing the exchanges, there is any chance of make mandatory to Chinese people take back the money that they have invested outside China?

If a Chinese has some ethereum in Bittrex and didn't tell about to the gov. Are they committing any kind of crime?

[BitHodler]

It's almost impossible to take any news article with the same subject serious anymore. One time you read that Chinese exchanges are going to halt all fiat related trading activities, and the other time they will get a license very soon.

If the latter mentioned becomes reality, which does make sense, then the far majority of what we have been reading through has been fake and full of fud in an attempt to get this market to tank significantly.

I think it's safe to say that time is our best friend in this case. There is literally nothing in the recent flood of articles that we can hold on to since everything might be full of nonsense ~ nothing is helping to reduce the uncertainties.