It's Getting Worse, OKCoin, FXBTC Report New Deposit Freezes

[Pangia]

http://www.coindesk.com/chinese-bitcoin-exchanges-okcoin-fxbtc-report-new-deposit-freezes/

Chinese Bitcoin Exchanges OKCoin, FXBTC Report New Deposit Freezes
Pete Rizzo (@pete_rizzo_) | Published on April 2, 2014 at 20:27 BST | Analysis,


Following on the heels of the news that China-based bitcoin exchange BTC38 would suspend fiat-to-digital currency trading, rival China-based exchanges OKCoin and FXBTC have received official notices from financial partners notifying them that certain accounts will be terminated.

The new announcements are the latest indication that China’s central bank, the People’s Bank of China (PBOC), may be following through on its decision to more actively enforce prior rulings related to how domestic financial service providers can interact with the bitcoin exchanges.

For example, while OKCoin was contacted by its third-party processor, FXBTC has been contacted by commercial banking providers.

China previously banned third-party payment services from dealing with bitcoin exchanges this past December. However, its domestic bitcoin exchanges had found a workaround for this issue by accepting payment into corporate accounts.

A new report from The Financial Times has suggested that the PBOC is now looking to close this loophole.

Notifications received

OKCoin revealed via its website that it had been contacted by one of its third-party payment processors, and that as a result, it will stop servicing deposits via prepaid card. Debit cards and yuan withdrawals, however, are not affected.

FXBTC’s situation at press time was perhaps more dire. It posted an emergency notification on its website that noted that it has received word from commercial banking partners who are looking to terminate certain accounts.

FXBTC indicated that it would stop debit card deposits as of 3rd April, and temporarily halt withdrawals after Sunday, 6th April. As of press time, however, it said its third-party processing channel – operated by Tencent’s TenPay – was still active.

Huobi reported that it had not received official notification that any of its accounts were affected.

Still no official notice

Together with the day’s earlier announcement from BTC38, the reports suggest that the PBOC may be pressuring the country’s commercial banks and payment companies to close bitcoin trading accounts.

Earlier reports had suggested that all accounts would need to be shut down by 15th April. However, the PBOC has yet to make an official announcement regarding any changes in policy.

This official notice may be unlikely, however, as BTC China CEO Bobby Lee has indicated that the PBOC is simply following a “stricter interpretation of the written rules” regarding bitcoin and digital currencies.

Community reaction and prices implications

Reaction to the news on reddit was still skeptical, with many indicating that the announcements don’t actually confirm that the PBOC will be looking to enforce the broad crackdown that has been suggested.

As of press time, the price of bitcoin on the CoinDesk USD Bitcoin Price Index (BPI) was down 8.41% on the news, having fallen $40 from the day’s opening total of $478.

Screen Shot 2014-04-02 at 2.33.34 PM

Prices in China were affected similarly, according to the CoinDesk CNY BPI, which at press time was down 7.25% from the day’s open of ¥2,861 at ¥2,653.74.

Additional reporting provided by Rui Ma.

[ebliever]

Well that explains today's drop. People overreacting as usual. There will always be loopholes to exploit, in a few weeks 99% of Chinese who use bitcoin will have found new access routes to use them. Governments are going to find out the hard way that they cannot keep it out short of pulling the plug on the internet.

[bountygiver]

Well that explains today's drop. People overreacting as usual. There will always be loopholes to exploit, in a few weeks 99% of Chinese who use bitcoin will have found new access routes to use them. Governments are going to find out the hard way that they cannot keep it out short of pulling the plug on the internet.

and hardcore investors are going to buy the s**t out of it once they found the exploit combined with the current price.

[Bit_Happy]

It's getting better, the China story is losing it's power to scare the market.
Things cannot get any worse for the China Bubble.

[jtsnau]

I'm just hoping this lasts another couple of weeks because that's when I get paid next.

Never thought I'd ever have the chance to buy BTC this cheap again.

[NWO]

I'll happily buy peoples unwanted BTC 

[BADecker]

If something like this moves to the U.S. in a big way, it will be up to individual people to become mini-exchanges (as they are doing already) and do Moneypak and debit card deals, etc., all over the place.

[Chemistry1988]

OKCoin: "had been contacted by one of its third-party payment processors, and that as a result, it will stop servicing deposits via prepaid card. Debit cards and yuan withdrawals, however, are not affected."

FXBTC: "has received word from commercial banking partners who are looking to terminate certain accounts", "stop debit card deposits as of 3rd April, and temporarily halt withdrawals after Sunday, 6th April."

Huobi: "had not received official notification that any of its accounts were affected."


Why does the story sound so different for them?

[skooter]

If something like this moves to the U.S. in a big way, it will be up to individual people to become mini-exchanges (as they are doing already) and do Moneypak and debit card deals, etc., all over the place.

Yeah, that's totally efficient, convenient, and secure.

So buying btc is like doing a drug deal.

[BitOnyx]

Even when there are a lot of people who are selling there are as many people who are buying and getting very happy .

A lot of people bought at 420 few weeks ago. Imagine income they get when they sold at 500.

Bitcoin will go up and people will sell some again. We call it speculation. In long run people will start to sell at 600. Then at 700 and so on.

[Onews1990]

China is completely trying to ban bitcoins in there, This is strange after remembering the days the government there was a little positive/or with no impression when the price reached the $1k mark and exceeded it.

[atp1916]

China is completely trying to ban bitcoins in there, This is strange after remembering the days the government there was a little positive/or with no impression when the price reached the $1k mark and exceeded it.

Um, no.

They are banning their financial institutions and fiat transmitting services from doing business with the exchanges.

You can trade bitcoin and other virtual currencies all you want (or could), but because the Chinese are nothing but speculators, the inability to cash out into fiat means bitcoin and the other virtual currencies are useless to them.

....and because the intrinsic value of Bitcoin (and bitcoins) is in the protocol and associated implications for innovation in just about any digital exchange (obliteration of the fee market) - we don't need or want markets which do not respect said innovation.

[Bramburel]

If the rumors are true and China's exchanges can't use any loopholes to deal with the banks what you guys think is a realistic price the Bitcoin will reach right after the rumor is confirmed?