[2017-11-09] Cryptocurrency Exchanges in China Are Officially Dead

[aysha9872]

China officially banned cryptocurrency exchanges after announcing it was considering the move back in September. (See more: How Might China’s Ban Affect Bitcoin?)

The last digital currency exchange in China was shut down as of November 1. With that final closure, the exchange of digital currencies in China officially became illegal. However, that's not to say that Chinese investors are not involved in the cryptocurrency space, only that they have been forced to look to other areas for their trading.

Servers Were Moved Abroad
One way that cryptocurrency exchanges in China have saved themselves is by shuttering their operations in the country and moving elsewhere. Huobi, one of the top three platforms for bitcoin trading, moved its base to Singapore, Hong Kong, and South Korea, according to a report by Forbes.

BTCC, another top exchange that was previously headquartered in Shanghai, planned to charge users a service fee in order to withdraw existing funds in the days preceding the ban.

Exchanges and ICOs Banned
China did not just close down cryptocurrency exchanges. Government regulators also shut down the ICO market. (See more: China's Ban on Bitcoin Exchanges Was Not Fake News After All.)

This was a major blow to tech companies bolstered by blockchain and the cryptocurrency space. Still, Chinese investors looking to move into the initial coin offering space could buy up tokens using offshore accounts.

Digital assets exchange C2CX suggested that the Chinese ban may not impede the cryptocurrency market much at all. (See more: China's Cryptocurrencies Have Gone Underground.)

"None of the exchanges previously based in China ceased business. They simply moved their servers abroad," said Scott Freeman, CEO of C2CX. "The only change is that for the moment, the funds will move in and out of local currency via P2P transactions instead of via direct deposit. From a regulatory perspective, this is an inferior solution because it's much harder to prevent money laundering."

Ironically, Chinese regulators cited concerns about money laundering and illicit activity as reasons for why they shuttered digital currency exchanges in the first place. Nonetheless, the fact that the cryptocurrency world is largely decentralized means that many investors are predicting it will just find a way around the Chinese ban.

Investors who are determined enough to continue to place their assets in the highly volatile and fast-moving cryptocurrency market will find a way to do so, even if it is through semi-legal and non-official pathways. In spite of the ban on exchanges and ICOs, the Chinese government indicated it will continue to explore blockchain technology developments.

Source: https://www.investopedia.com/news/cryptocurrency-exchanges-china-are-officially-dead/

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[1714050071]

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[Embeco]

They were too slow. China always said they only wanted to ban ICOs and exchanges until they found a better solution for protecting its users. (If you believe this or not is another thing, but it doesn't matter in this case) They had people from the  crypto community in der commitee (like the founder team of NEO), but obviously they did not manage to find a better solution.

[honeyb0y]

So what will happen to the bitcoins that their citizens hold? Can they go abroad then trade it there and just bring the fiat back to China without violating this law? They also havea huge percentage on the bitcoin mining industry how do you expect those miners to earn?

[veleten]

I think they could not find a proper way to regulate and prevent capital flow,but the decision is not permanent
as soon as they realise there will be ways for chinese to exchange bitcoins anyways,just using foreign exchanges
thus paying percentages to them,the leadership could reconsdier the ban and lift it
but at the moment one of the largest markets is migrating elsewhere,Japan and Korea should be very happy with it

[Kemarit]

So what will happen to the bitcoins that their citizens hold? Can they go abroad then trade it there and just bring the fiat back to China without violating this law? They also havea huge percentage on the bitcoin mining industry how do you expect those miners to earn?

It was reported that bitcoin trading still exist underground or OTC. Chinese will always find a way to continue with their bitcoin activity. However, it has risk so until we heard that someone is caught and what appropriate actions will be taken by the authorities, I believed that bitcoin will be alive in China. Another thing that crosses my mind is that maybe they can do cross borders like going to Japan, South Korea and Taiwan to resume their bitcoin trading.

[jekjekman]

I clearly don't understand the government of China to what they up to in regard of cryptocurrencies exchanges if this issue is really true or will be finalize soon because if the Chinese government hates Bitcoin or cryptocurrencies then they must ban it along with the Chinese cryptocurrency miners to show the world that they are really into it and to show that they can control its citizens but they are more into exchanges and not those miners where the sources of coins came from.

My perspective about this is if they can't regulate it then abolish the cause and effect of it otherwise they must put a dedicated department of their government to control and regulate the inside and out of cryptocurrencies.

[Agostosmori]

They were too slow. China always said they only wanted to ban ICOs and exchanges until they found a better solution for protecting its users. (If you believe this or not is another thing, but it doesn't matter in this case) They had people from the  crypto community in der commitee (like the founder team of NEO), but obviously they did not manage to find a better solution.

Why are they banning the exchanges without banning the mining farms?
And why are they just banning it not declaring it as illegal, are they just trying
to hoard as much number of bitcoin as possible and will eventually remove the
ban on their exchanges in the future?