Bitcoin China announces suspension of RMB top-up transactions and may turn to overseas

Bitcoin China announces suspension of RMB deposits

Beijing News (Reporter Mi Di) The closure of the Bitcoin trading platform has entered the countdown. Yesterday, Bitcoin China, which once claimed to be "China's first Bitcoin trading platform", announced that it would close the digital asset and RMB recharge functions at 12:00 noon, and once again emphasized that it would stop all trading business at 12:00 noon on September 30.

Most platforms will stop trading before September 30

According to the announcement, BTC China will shut down the digital asset and RMB top-up functions at 12:00 noon on September 27, Beijing time, and will stop all trading operations at 12:00 noon on September 30. The announcement stated that the final withdrawal deadline for the platform's digital assets and RMB is 12:00 noon on October 30; if users do not want to keep their digital assets, please convert them into RMB as soon as possible before withdrawing them.

The announcement stated that Bitcoin China’s mining pool (Guochi) and other businesses are currently not affected and continue to operate normally.

Previously on September 4, the central bank and other departments issued the "Announcement on Preventing the Risks of Token Issuance and Financing", which stopped the ICO (Initial Coin Offering) financing that was heating up and was also accused of having huge risks, and made it clear that any token financing trading platform must not engage in the exchange of legal currency and tokens, "virtual currency", must not buy or sell tokens or "virtual currency" or act as a central counterparty to buy or sell tokens or "virtual currency", and must not provide pricing, information intermediary and other services for tokens or "virtual currency".

According to the requirements, except for a few websites, most platforms will stop related transactions at the end of this month. Among them, Yuanbao.com will stop all website transactions at 20:00 on September 28, Jubi.com will stop all virtual currency transactions before 24:00 on September 30, and Yunbi.com, invested by Li Xiaolai, has permanently closed all product trading functions on September 20.

OKCoin and Huobi will gradually stop all digital asset-to-RMB trading operations before October 31, and will gradually stop all virtual currency trading operations in the future. They are considered to have been given a one-month "grace period."

On-site trading plummets, or turns to overseas

In recent days, the trading volume of various Bitcoin platforms has plummeted compared to before. Take OKCoin as an example. At around 18:45 yesterday, its 24-hour trading volume was 3291.84 Bitcoins. Previously, its daily trading volume often exceeded 10,000 Bitcoins.

What to do if you can’t trade on domestic platforms? In an investor group, a person claiming to be from the platform replied that a cryptocurrency trader who didn’t want to leave the platform could transfer the cryptocurrency to its overseas platform.

Currently, Huobi and OKCoin, two major domestic platforms, both have overseas sites. According to informed sources, a senior executive of the platform pointed out in an internal speech that if the rumors of banning the Bitcoin platform are true, the company will focus on developing overseas currency issuance business and strive to promote overseas licenses.

Financial analyst Xiao Lei pointed out that over-the-counter investors will first face credibility risk. When trading, they use RMB to buy Bitcoin, or sell Bitcoin and get RMB back. If it is not face-to-face, it is difficult to guarantee safety.

Xiao Lei believes that China's closure of exchanges will have an impact on the development of the global Bitcoin market; however, the government has not declared Bitcoin an illegal asset. In this case, the rigid demand for Bitcoin may shift to the off-site market.

"The price has not fallen yet, mainly because there is still demand in the international market. The heat still exists in the short term, and everyone is still looking for channels. The exchange data may drop rapidly, but over-the-counter transactions are difficult to count." Xiao Lei believes that in the medium and long term, domestic policies are basically "very clear" and major trading products such as Bitcoin have been restricted to a very small market.

■ Bitcoin Story

Investors: Some cleared their positions while others held on

"I have sold all my stocks." Old Wu (pseudonym), who has been speculating in cryptocurrencies for many years, told reporters: "For people like us, what is the difference between stocks and Bitcoin? Aren't they both speculation? Who buys stocks without expecting them to rise? Who buys cryptocurrencies without expecting them to rise?"

"My savings of two years were taken away by scammers." One player posted a picture of the plummeting prices of various coins on his Weibo account. However, there are still Bitcoin investors who continue to hold on.

"I'll take 22,000 bitcoins. Some people send me private messages, scammers go away." Wang Li (pseudonym) posted a message on Weibo not long ago. Yesterday, she told reporters that moving the coins to overseas platforms is one of the ways to make a profit. "24,500 each." With the fluctuation of the market, the price she quoted yesterday was higher than the previous few days. Another OTC coin collector told reporters that some people still choose OTC transactions for the purpose of money laundering and avoiding foreign exchange supervision.

Beijing News reporter Mi Di

Professional players: "trading over the wall" through overseas accounts

Mr. Wang (pseudonym) is a relatively experienced Bitcoin "player" in China. According to him, the Bitcoin players he is familiar with are divided into two groups: some professional Bitcoin "players" with US dollar accounts can continue to trade Bitcoin on overseas Bitcoin trading platforms through anti-censorship software; while the other group of novice players who have neither overseas US dollar accounts nor much operating experience can only return their coins.

"Bitcoin is originally a transaction at one's own risk. It can neither be exchanged for goods nor for money in China, but this does not affect the exchange of currency in foreign countries. As long as you have an overseas US dollar account and a VPN," said Mr. Wang. "It is very convenient to bypass the firewall. A VPN costs about 30 yuan per month, and players can directly jump to the Internet. After jumping to the Internet, there are many foreign Bitcoin trading websites. As long as you have a US dollar account, you can directly recharge the currency."

Mr. Wang thinks it is relatively easy to open a US dollar or other foreign currency account. "You can apply for a card in Hong Kong, and use this card to convert funds into Hong Kong dollars or US dollars. From then on, this card can be linked to foreign currency trading platforms, and you can exchange and trade currencies at any time, and then return to this card after cashing out."

In November 2016, Mr. Wang went on a business trip to the United States. From his observation at the time, he found that some banks in the United States could directly handle Bitcoin settlement business, and "many overseas countries and regions directly recognize Bitcoin."

Beijing News reporter Huang Xinyu

Parents of international students: Agents no longer do "over-the-counter transactions"

For Mr. Leng (pseudonym), dealing with Bitcoin is due to the need for his son to study abroad. Mr. Leng's son has been training in ice hockey at a Canadian school for a long time. In addition to his son's tuition and miscellaneous fees, he or his wife also have to pay for the living expenses when they accompany him to study, so the conventional foreign exchange limit seems to be stretched for them. Using Bitcoin to exchange and settle foreign exchange outside the limit has become their financial need.

For similar reasons, Bitcoin's OTC trading is quite popular. Mr. Leng said that when domestic Bitcoin trading was not restricted, parents who did not have overseas US dollar accounts would ask some domestic OTC "middleman friends" for help. According to a screenshot of Mr. Leng's WeChat Moments, when Bitcoin was trading at a high point in June this year, a "big V" in the OTC trading circle had a daily trading volume of 9.1 million US dollars.

This "big V" said in his circle of friends at 8:17 am yesterday: "From now on, in order to avoid unnecessary trouble, please do not trade Bitcoin with me. I will not do over-the-counter transactions in the future, only transactions outside the wall."

Beijing News reporter Huang Xinyu

■ Related News

Macau Monetary Authority: Bitcoin involves a lot of risks

Yesterday, the Monetary Authority of Macao once again issued a risk warning, reiterating its previous view in 2014: Bitcoin is a virtual commodity, not a legal currency or financial instrument, and is not subject to regulation. Transactions in virtual commodities involve a large number of risks, including but not limited to money laundering and terrorist financing, and participants must pay special attention.

The Monetary Authority of Macao stated that in view of the recent surge in token issuance and financing activities on the mainland and the prevalence of speculation, mainland ministries and commissions have expressly prohibited financial institutions and non-bank payment institutions from providing services for token issuance financing and virtual currencies. The Macao authorities have also sent a letter requesting all banks and payment institutions in Macao not to directly or indirectly participate in or provide any financial services related to them.

Last week, JPMorgan Chase CEO Jamie Dimon called Bitcoin and the entire digital currency industry "a scam," saying "Bitcoin is not a real thing, it is heavily speculated." The Bank for International Settlements (BIS) said that central banks around the world cannot sit idly by and allow the development of cryptocurrencies because it could pose a risk to the stability of the financial system.

In addition, according to media reports, Hong Kong regulators have also publicly stated that banks and financial institutions should be cautious in complying with anti-money laundering requirements when trading or processing Bitcoin or other digital currencies. In addition, some foreign countries and regions, including Japan, have also begun regulatory work related to Bitcoin. (Mi Di)