China blocking 120+ offshore cryptocurrency exchanges as "crackdown" escalates

[Hydrogen]

China is poised to block more than 120 foreign cryptocurrency exchanges as part of the government’s broader crackdown on activities related to digital money, according to state media.

Authorities will block access in China to 124 websites operated by offshore cryptocurrency exchanges that provide trading services to citizens on the mainland, the Shanghai Securities News, a newspaper affiliated with the country’s financial and markets regulators, reported on Thursday.

It said authorities will also continue to monitor and shut down domestic websites related to cryptocurrency trades and initial coin offerings (ICOs), and ban payment services from accepting cryptocurrencies, including bitcoin. The newspaper cited people close to the Leading Group of Internet Financial Risks Remediation, which was set up by China’s cabinet in 2016 and headed by Pan Gongsheng, a deputy governor of the People’s Bank of China – the country’s central bank.

Multiple calls made by the South China Morning Post to the central bank went unanswered.

The report marks the latest effort by Beijing to intensity the clampdown on cryptocurrency activities because of concerns about financial instability.

Censors recently shut down at least eight blockchain and cryptocurrency-focused online media outlets, some of which raised several million dollars in venture capital. These entities found their official public accounts on WeChat blocked on Tuesday evening, owing to violations against new regulations from China’s top internet watchdog.

Separately, Beijing’s central Chaoyang district issued a notice on August 17 banning hotels, office buildings and shopping malls in the area from hosting events promoting cryptocurrencies. The document was leaked online this week, and confirmed by the Post with the local authority.

Last September, Chinese regulators banned ICOs, describing them as an unauthorised illegal fundraising activity. During the same month, Chinese regulators also ordered Chinese cryptocurrency exchanges to cease trading.

ICOs are a form of crowdsourced fundraising by which companies exchange their newly created cryptocurrencies – called tokens – for payments in an existing currency, usually an established cryptocurrency such as ethereum or bitcoin. ICO investors profit when their tokens gain in value at a faster rate than the currency they used to pay for them.

The government crackdown prompted Chinese cryptocurrency exchange operators and ICO projects to move their operations in friendlier jurisdictions, such as Singapore.

In February, state media first reported that China will soon block all websites related to cryptocurrency trading and ICOs – including overseas platforms. Popular cryptocurrency exchanges, including Bitfinex, Bitnance, Huobi and OKEx, have since been blocked on the mainland.

Since the crackdown began last September, a total of 88 cryptocurrency exchanges and 85 ICO projects have been shut down in China, and the yuan-bitcoin trading pair has dropped from 90 per cent to less than 5 per cent of the world’s total bitcoin trades, according to Shanghai Securities News.

Pan, the central bank deputy governor, said in Beijing last December that China made the right decision to clamp down on cryptocurrency exchanges.

“If things were still the way they were at the beginning of the year, over 80 per cent of the world’s bitcoin trading and ICO financing would take place in China – what would things look like today?” he said. “It’s really quite scary.”

https://www.scmp.com/tech/enterprises/article/2161014/china-block-more-120-offshore-cryptocurrency-exchanges-crackdown

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This latest announcement out of china didn't appear to affect the price of bitcoin at all.   

It wasn't long ago when an announcement like this could carry a 5% to 10% negative effect on bitcoin's price. Now: nothing! No effect whatsoever. If anything bitcoin's price appreciated. No one appeared to notice or care that china had anything to say about it. Interesting how times change.

Many have labeled these "crackdowns" as china's attempts to prevent capital flight. To prevent capital and money trickling outside its borders as an act of economic protectionism. There's an interesting side angle to this which has nothing to do with bitcoin or crypto currencies in general.

Perhaps we're witnessing the birth of a new era where bitcoin has become decentralized enough that china no longer has much effect upon its value. A far cry from 2014 when bitcoin plummeted after china announced "crackdowns". What do people think about this?

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[magneto]

I reckon that after China denounced bitcoin exchanges in its country, traders became aware of the fact that what happened with the bitcoin policy within China was no longer relevant. There would always be ways around the restrictions as bitcoin is after all, decentralised. Individual pieces of news like this therefore, doesn't really make anyone panic anymore.

I definitely agree in the fact that these measures are probably to prevent capital flight, just as why there is a limit on the amount of foreign currency that Chinese citizens are able to exchange each year. Perhaps China is just seeing bitcoin as a threat as it could facilitate the outflow of capital from its country much like any forex.

It's no surprise that bitcoin exchange sites are being blocked by the great firewall either, that's completely expected and Chinese policies in the past with blocking foreign social media sites make many precedents. It'll be hard to see how this will be maintained though, as VPNs and proxies can be easily used, and new sites will always pop up.

[jseverson]

It wasn't long ago when an announcement like this could carry a 5% to 10% negative effect on bitcoin's price. Now: nothing! No effect whatsoever. If anything bitcoin's price appreciated. No one appeared to notice or care that china had anything to say about it. Interesting how times change.

China news hasn't affected Bitcoin prices for a long time. I don't think there's anything they can do that will be able to move the market, except for maybe banning mining completely? Even then, I doubt it will be a big issue.

Another thing to consider is that most Chinese residents who are inclined towards bypassing the great firewall have likely mastered the art of using VPNs or whatever tools to do whatever they want. I wouldn't be surprised if people who have been using offshore exchanges have already been using a VPN anyway. This is probably won't have a substantial effect for the existing Chinese traders.

[timerland]

Many have labeled these "crackdowns" as china's attempts to prevent capital flight. To prevent capital and money trickling outside its borders as an act of economic protectionism. There's an interesting side angle to this which has nothing to do with bitcoin or crypto currencies in general.

Potentially. Historically China has been pretty restrictive of anything that could bring capital flight, including any foreign currencies. But I do think that that's probably not the only reason that they've announced this newest crackdown, as they've also shown pretty negative sentiment over bitcoin in particular historically.

Perhaps we're witnessing the birth of a new era where bitcoin has become decentralized enough that china no longer has much effect upon its value. A far cry from 2014 when bitcoin plummeted after china announced "crackdowns". What do people think about this?

This is probably much bigger magnitude of a crackdown than we've seen in 2014. I guess markets have matured to the point where don't care much about the policies of China because they already expect them to be negative anyways, and as you mentioned, bitcoin has became a lot more decentralized geographically than China dominating the market or just one country dominating, which is another factor.

As others have mentioned, it's again, a very hard to enforce ban. Major traders in China have international connections anyways. A lot are already overseas. Others still in China will simply use a variety of methods to get over the blocked sites, just as they would access FB or Youtube which are also blocked from China. Also, P2P trading activity will still be thriving regardless of the ban.

[tee-rex]

It wasn't long ago when an announcement like this could carry a 5% to 10% negative effect on bitcoin's price. Now: nothing! No effect whatsoever. If anything bitcoin's price appreciated. No one appeared to notice or care that china had anything to say about it. Interesting how times change.

I remember as in early 2017 (in January and February, to be exact) bitcoin price crashed almost 30% and it happened twice, though these were flash-crashes. In the end, they turned out to be excellent opportunities to buy low, exceptionally low, before bitcoin shot to the moon. And the second time the effect was less pronounced anyway. All further attempts to undermine bitcoin that the Chinese authorities had undertaken in summer, 2017, failed as miserably.

Many have labeled these "crackdowns" as china's attempts to prevent capital flight. To prevent capital and money trickling outside its borders as an act of economic protectionism. There's an interesting side angle to this which has nothing to do with bitcoin or crypto currencies in general.

I never truly understood that thing with capital flight via crypto. If no money, no gold, no value gets transfered across the border, where's capital flight here? Of course, if we think that crypto is the money, it changes everything, but then it means that the CPC (Chinese communists) also think so and value crypto as high as they value, for example, American dollar.

Perhaps we're witnessing the birth of a new era where bitcoin has become decentralized enough that china no longer has much effect upon its value. A far cry from 2014 when bitcoin plummeted after china announced "crackdowns". What do people think about this?

That has been so since spring, 2017.

[jseverson]

I never truly understood that thing with capital flight via crypto. If no money, no gold, no value gets transfered across the border, where's capital flight here? Of course, if we think that crypto is the money, it changes everything, but then it means that the CPC (Chinese communists) also think so and value crypto as high as they value, for example, American dollar.

It's basically capital flight if the Chinese spend their money on worthless stuff from foreigners, so that's probably the biggest motivation in banning ICOs.

As for crypto exchanges themselves, China has had a capital flight problem for a while now (even without crypto in the picture), and they probably think that exchanges make it easier to move money overseas. They're just trying to plug every hole they see.

[tee-rex]

Perhaps we're witnessing the birth of a new era where bitcoin has become decentralized enough that china no longer has much effect upon its value. A far cry from 2014 when bitcoin plummeted after china announced "crackdowns". What do people think about this?

This is probably much bigger magnitude of a crackdown than we've seen in 2014. I guess markets have matured to the point where don't care much about the policies of China because they already expect them to be negative anyways, and as you mentioned, bitcoin has became a lot more decentralized geographically than China dominating the market or just one country dominating, which is another factor.

But what happened in 2014? I think there is some white space in my memory, anyone care to fill it?

I remember when the central bank of China ordered all local exchanges to shut down both deposits and withdrawals of cryptocurrencies, which caused kind of a panic across the markets. But it was a year and a half ago, not in 2014, and it was rather short-lived anyway. After that people finally started to understand that China doesn't actually have a lot of weight in the cryptoverse. There might be plenty of big fish from China, but given their wealth and attitude, they are unlikely to stay in their homeland bearing the risk of having their wealth confiscated by commie parasites.

[kryptqnick]

Thank God China is not affecting the market that mich anymore. It should really stop banning what cannot be banned. Some smart Chinese people will flee from the country simply because doing business will be impossible there. A fair part of the market will go underground, circulating unknown amounts of money and occasionally bursting them into the system. Why lose money from where you can profit? They should've just sent a small additional fee for exchanges to operate legally (by small I mean something like 0.5%) and increase the national economy instead of ruining it!
As for the price, I think that $6k something is an actual minimum price of btc and people are not willing to trade anything lower. The minimum is probably growing slowly, so soon no FUD will affect the prices significantly.

[1Referee]

Thank God China is not affecting the market that mich anymore.

Indirectly it does a lot. The only reason the market isn't reacting to these news releases anymore is because of how everyone here psychologically has stepped over China. It's worth to say that China could actually still be the biggest market for Bitcoin with dozens of millions (and still growing) of crypto users.

It should really stop banning what cannot be banned. Some smart Chinese people will flee from the country simply because doing business will be impossible there.

China's main incentive is to block easy access to everything crypto related for the mass. The few people that will bypass restrictions are nothing more than collateral damage for the government there. In every country, regardless of how harsh the government's iron fist barbary is, you have enough people going against them (in some cases with their life at stake). Much respect to these freedom fighters.

[florianuhlemann]

perhaps this news has already been laid in the current fall. another option is that the cryptocurrency will react to the news later, when official documents are adopted

[The Sceptical Chymist]

Perhaps we're witnessing the birth of a new era where bitcoin has become decentralized enough that china no longer has much effect upon its value.

Maybe.  I hope that's true, anyway.

Also, I didn't even realize there were that many "off-shore" exchanges outside of China.  That's amazing that there are over 120 to begin with.  I'm only familiar with the handful that are mentioned on bitcointalk.  I've never really seen a comprehensive list of exchanges.

But the article also said this:

It said authorities will also continue to monitor and shut down domestic websites related to cryptocurrency trades and initial coin offerings (ICOs), and ban payment services from accepting cryptocurrencies, including bitcoin.

So is the government cracking down on Chinese exchanges as well?  That would definitely suck for them, and I can't imagine that would be a good thing for bitcoin as a whole, given how many Chinese bitcoiners there are.  The ICO part of that I can understand, since even the US has banned participation in those for its citizens.  Most are scams anyway.

[Semosuchi Tesongrato]

The behavior of large institutions towards cryptomonete is ambiguous.
After the great proclamations of the beginning of the year and the relative declarations of war it seems almost that the argument no longer interests anyone, except for a few specialists.
I would like to know if they are really trying to stifle the phenomenon of crypto, as China in this case,  or they are preparing a move to deceive the public by proposing - every superpower, of course - some "bitcoin of the government".
It would be the death of Satoshi's ideal, of course.
But I expect - soon - the birth of Facebookcoin, Googlecoin, Amazoncoin, ... in that case for the crypto - the real ones - it will be really over.

[flowers5]

Kinda funny watching China run around trying to stop the inevitable.  Also amazing watching billions of people do nothing as their freedoms are trampled.  It's a sad state of affairs at this point.  Hopefully we can keep moving forward as a people and attempt.  It appears the world needs slaves to make junk for us all.  The Chinese government most likely gets paid off to suppress their people from advancing by all means necessary so the rest of the world can "get what they deserve"

[Andrej Peiboski]

It seems to me a resounding fake news.
China would not have a particular interest in buying such a move, and I do not even know if it can practically do it.
Comunqe, China's behavior has always been rather uneven towards the crypto.

[pitiflin]

Perhaps we're witnessing the birth of a new era where bitcoin has become decentralized enough that china no longer has much effect upon its value.

Lol. That era will never exist. Never has,never will. China still has a huge number of people who use crypto. They still have mining farms? I am not so sure, but electricity is the same, but the labour might not be because of the movement of factories bullshit.

So is the government cracking down on Chinese exchanges as well?  That would definitely suck for them, and I can't imagine that would be a good thing for bitcoin as a whole, given how many Chinese bitcoiners there are.  The ICO part of that I can understand, since even the US has banned participation in those for its citizens.  Most are scams anyway.

They were trying that even before they banned ICOs. Even if they block all these, there's still gonna be P2P trading,so nice try China lol.

[Biscutard]

It seems to me a resounding fake news.
China would not have a particular interest in buying such a move, and I do not even know if it can practically do it.
Comunqe, China's behavior has always been rather uneven towards the crypto.

Much more than like that and guess what, someone was always trying to make a change in order to draw the people's attention from somewhat they were doing. This is too common in all different platform from either social media or either the media itself but now it seems that it has no huge effect in crypto market.