The world of cryptocurrency trading was dealt another blow with the recent announcement that leading Chinese bitcoin exchanges Huobi and OKCoin are terminating select deposit services by April 14.
This unwelcome news comes on the heels of an April 10 statement via BTCTrade, BTC100, and Huobi, which informed clients of the cessation of bank accounts by an assortment of supporting financial partners and affiliates – OKCoin was made aware of deposit freezes over a week earlier on April 2. Consequently, the recent pressure has sent the price of bitcoin plunging over the past week.
Chinese Government At Odds With Cryptocurrencies
The Chinese government has been one of the staunchest opponents of bitcoin in recent months, with the central bank relentlessly thwarting the crytocurrency’s ascension. These recent announcements echo earlier issues facing Chinese exchanges, which now are scrambling to find means of contingency amidst fierce PBOC pressure.
As a counterbalance, Huobi is diligently working to culture additional means of cooperation, namely with onshore financial firms to forgo any repeat of MtGox fallout that roiled the bitcoin industry earlier this year. According to a recent statement released by the exchange, “Huobi has already registered for and opened overseas incorporation and offshore accounts, and can use them at any time.”
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Alternately, OKCoin has also made attempts at securing offshore affiliates and measures, culminating in the development of an overseas website to help lend stability and security to its comprehensive platform. Despite the fears exhibited by both Huobi and OKCoin, neither has received an official edict demanding the termination of business relationships with their exchanges.
“Each bank’s interpretation and execution of the policy is different, and so it may be that the current situation is an over(ly careful) reading of the policies by the authorities, and so it is not necessarily the case that all banks will stop business with bitcoin exchanges,” Huobi’s statement went on to say. Ultimately, we believe firmly that policy adjustment won’t make China Bitcoin decline, but [provide] a test for exchange platforms.”
Huobi Defends Actions, Uses Choice Words
It is no secret that the bitcoin has been a thorn in the PBOC side for some time now, though the central bank has justified its actions, citing an effective check against money laundering and the preservation of domestic financial security.
Indeed, Huobi released the following statement: “If online trading platforms that are following the rules have to stop services, bitcoin transactions will go offline where they will be unmonitored, and will result in even more difficulty regulating.” PBOC governor Zhou Xiaochuan, has noted that the Chinese central bank would not ban bitcoin, despite its new policy initiatives. Time will tell whether this proves to be the case however.