Huobi, reportedly the world’s largest bitcoin exchange by volume, has announced that they have received notice from their bank, ICBC, that they will be closing Huobi’s account by April 18. They become the latest and most prominent exchange to be affected by the recent crackdown by the PBOC on Bitcoin-related business accounts. BTCTrade has also come out today informing clients of a suspension in deposits after they too were given notice that their account will be closed.
Two weeks ago as rumors just emerged, Huobi CEO Leon Li told DC Magnates that they have not received any official notification. Last week, the exchange sought to reassure clients in an update that they had not received any notice, even after checking with all four of their banking partners.
The announcement, marked in red on their homepage, goes on to describe how their Zhongguancun Branch of ICBC received “oral notice” from Operations Management to close their account. Members of the Huobi team immediately rushed over to the branch, where customer service representatives confirmed the news, although they said they still had not received anything in writing.
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Asked if there’s any room to negotiate or work around, the bank responded that there isn’t. Moving forward, funds can be moved to another financial institution.
Deposits into Huobi will be suspended effective this Monday, April 14. However, they will use accounts at other financial institutions for the transfer of funds.
Bitcoin, after initially dropping yesterday by 3% following relatively flat activity, has plunged today as low as $400 before slightly recovering to $415. The drop could have been much worse. The price likely already factors in the latest China developments, which started as rumors two weeks ago. Also, traders initially rattled by the news are still awaiting the full implications of the crackdown and if there will be any workarounds.
A full-scale ban with no effective workarounds can technically cause Bitcoin to plunge as low as $200, the last stable level before cryptocurrency took off in China last fall.