Bitcoin Falls 10% as Chinese Central Bank Starts Investigation of Exchanges

The price of Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term has fallen sharply today after the Chinese central bank confirmed rumours that it is investigating the operations of China's bitcoin exchanges - the world's largest. From a level of about $910 earlier it has dropped to levels now around $790.

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BTCC, Huobi and OKCoin appear to be unfazed by this and are functioning as normal.

People's Bank of China has announced today (link in Chinese to PBOC website) that its Shanghai headquarters, the Shanghai Municipal Finance Office, and other government bodies are to form a joint inspection team on Bitcoin in China. It will carry out on-site inspections at Bitcoin exchanges, focusing on checking whether they go beyond the authorised scope of the market, whether or not they have a license to carry out credit, payment, exchange and other related business; as well as whether there is any market manipulation, Anti-Money Laundering (AML) Anti-Money Laundering (AML) Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification Read this Term) system implementation, financial security risks and so on.

Charles Hayter, the CEO of CryptoCompare.com, comments: "This is a ratcheting of the rhetoric from the Chinese Authorities - instead of "we're watching" you it's now "we're investigating" you.

The intentions of the Chinese state are clearer and it looks like they're trying to bring the Chinese Bitcoin exchanges to heel - whether they are looking to make an example is yet to be seen.

The long term implications of this move are positive as more rigour in the Chinese market only matures and brings respectability to the industry - but in the short term this could affect volumes which have been one of the key drivers of the recent rally.

At present the CNY market sit at a discount of $10 from the USD price. The recent market has been led with the Chinese pairs trading at a premium of up to $100 dollars so this is a significant reversal of the key trend."