Huobi.com and OKCoin stop all virtual currency business; platform managers are temporarily not allowed to leave Beijing

The suspense about whether Bitcoin and other virtual currency exchanges will retain two outlets has finally been revealed, and China will bid farewell to traditional Bitcoin trading platforms. After announcing that all digital asset-to-RMB transactions would be phased out at the end of October, on September 16, Huobi.com and OKCoin both revised their announcements to say that they would stop all virtual currency transactions in the next step.

Industry insiders said that this move means that the cryptocurrency trading on the platform, or the information matching-based person-to-person virtual currency trading business, will also be completely stopped. Almost all the on-site trading channels of Bitcoin in China have been blocked.

Huobi and OKCoin will cease all operations

At noon on September 16, Huobi and OKCoin revised the announcement issued the day before regarding the suspension of RMB trading business, stating that they would stop all virtual currency trading business in the next step.

On September 15, Huobi and OKCoin, two Bitcoin trading platforms with the largest trading volume in China, were interviewed by the central bank and other regulatory authorities. That evening, they successively issued announcements announcing the suspension of RMB trading business. However, the two trading platforms stated in the announcement that "only RMB trading business will be suspended, and other businesses will not be affected."

Before these two platforms, known as "barometers" in the industry, announced the suspension of RMB trading business, the Beijing News reporter exclusively learned that on the afternoon of September 15, the central bank and other regulatory authorities interviewed OKCoin, Huobi and other Bitcoin exchanges. According to regulatory personnel attending the meeting, the regulatory authorities currently require Bitcoin trading platforms to report shutdown plans, and the shutdown time can be early or late, but they will all be shut down in the end. For risk considerations, Bitcoin trading platforms that are not operating in a standardized manner, such as ICO token transactions, will be shut down first, and the rest will be shut down slowly. The regulatory authorities also made requirements for the specific shutdown time.

Later that evening, the two platforms issued announcements with almost identical wording: registration and RMB recharge services will be suspended from 21:30 on September 15, 2017; in addition, the two platforms will notify all users of the upcoming trading suspension before September 30, and will gradually stop all digital asset-to-RMB trading services before October 31. The announcement also pointed out that the two platforms' services such as currency recharge, currency withdrawal, cash withdrawal, and trading between virtual currencies will not be affected.

In fact, before Huobi and OKCoin announced the closure of all businesses, on the evening of September 14, BTC China announced that it would stop all digital asset trading business on September 30. Since then, other virtual currency exchanges including Weibit and Yunbi.com invested by Li Xiaolai have also issued announcements to close their trading platforms.

Industry insiders: Platform leaders are temporarily not allowed to leave Beijing

"Everything is over, and the only illusion is shattered." Yesterday, several industry insiders told the Beijing News reporter that all this ended with OKCoin and Huobi.com announcing the closure of all businesses.

The above-mentioned person said that after ICO was sentenced to "death", Bitcoin and other virtual currency trading platforms were also cleared. Before September 15, the industry had illusions. Although the regulatory authorities believed that Bitcoin and other virtual currencies were suspected of money laundering and illegal fundraising, they had also formulated multiple versions of regulatory plans, including "one-size-fits-all" closure, and the phased closure of the free exchange of legal currencies such as RMB and virtual currencies such as Bitcoin within a time limit. There was even a version that suggested retaining OKCoin and Huobi because these two platforms operated in a standardized manner and had not launched ICO tokens.

"At the regulatory meeting held on September 8, OKCoin and Huobi were praised by the regulatory authorities." An insider said that although there were regulatory voices at the time to shut down virtual currency exchanges, the industry still had hope for the above two platforms.

On the evening of September 15, OKCoin and Huobi.com announced that they would stop their RMB trading business. "This means that investors can still trade coins on the platform, although such transactions contribute less than 20% to the platform's revenue." An insider explained that the closure of the RMB trading business actually means that the platform can basically not survive, which is equivalent to a change to a suspension. However, at noon on September 16, the above two platforms still announced that they would stop all virtual currency trading business. However, many platforms have moved overseas and laid out overseas coin-to-coin transactions.

According to multiple insiders, the heads and executives of all bitcoin trading platforms are not allowed to leave Beijing and must cooperate with the investigation. According to regulatory requirements, shareholders, actual controllers, executives, and financial managers of all trading platforms must fully cooperate with relevant work in Beijing during the cleanup and exit period.

Industry insiders believe that as the two virtual currency trading platforms shut down all their businesses, the price of Bitcoin is expected to fall further. However, as the negative news has basically been exhausted, investors are temporarily stable and the price of Bitcoin has also stabilized temporarily. As of press time yesterday, the price of Bitcoin fell slightly and was quoted at around 19,000 yuan.

Extension: OTC trading heats up again

While regulators have stopped trading on exchanges mediated by platforms, over-the-counter transactions, where money is exchanged with coins, have heated up again. According to statistics from the Coin Dance website, China's over-the-counter trading volume has reached 30 million yuan in the past week.

The last time the volume of OTC transactions surged was when regulators entered the three major exchanges, Huobi, OKCoin and BTC China, at the beginning of this year. At that time, as the exchanges suspended withdrawals, the volume of OTC transactions once approached 100 million yuan per week.

In the world of Bitcoin, everyone has a wallet, and each wallet has a corresponding address. Bitcoin can be withdrawn from one address and transferred to another address, and the withdrawal operation is completed without converting to RMB or other currencies. In over-the-counter transactions, one party transfers funds to the other party through Alipay, WeChat or bank transfer, and the other party transfers the Bitcoin to the payer's wallet.

Now, after the end of on-exchange trading, various OTC trading guides and websites have been circulated on various websites, many of which are built abroad. Some people have also set up relevant QQ groups to conduct corresponding transactions.

Financial analyst Xiao Lei told reporters that the purpose of the regulator's move this time is to cool down the domestic market. As for the price of Bitcoin, if the international market does not see a sharp decline, the trend of the domestic market remains to be seen.

He believes that if regulators do not completely ban the holding of Bitcoin and do not declare the holding of Bitcoin illegal, then China's over-the-counter market may still be one of the largest over-the-counter markets in the world in terms of both stock and trading willingness.

How big is the risk of over-the-counter trading? The reporter browsed websites such as coincola and localbitcoins and found that although many people claimed that "Alipay will release the funds in seconds" and "operate in good faith", many investors still complained about "scammers" in the forum: some reported that sellers cheated one after another, and some used PS screenshots to prove to the other party that they had paid...

Investors: Big players continue to hold, small investors withdraw

As a big name in the cryptocurrency circle, Wang Dapao told the Beijing News reporter that he first came into contact with Bitcoin in 2010, when the price was less than one yuan. However, he did not invest.

In July 2013, Wang Dapao learned that the price of Bitcoin had reached more than 500 yuan. He started investing and bought 15 Bitcoins at around 650 yuan. Later, he sold them when the price rose to 800 yuan. Later, he bought them again at 900 yuan and sold them again at around 1,500 yuan.

After many transactions, he bought more than a dozen bitcoins at a price of more than 6,000 yuan in March this year, and tens of thousands of Ethereum at a price of 80 yuan. After reaching a peak of more than 30,000 yuan, Bitcoin is currently priced at around 16,000 yuan, while Ethereum reached a maximum of 3,000 yuan in July and has now fallen to more than 1,000 yuan.

"My experience tells me that if you buy something, don't sell it. At present, I choose to continue to hold these two types of virtual currencies. I think that national supervision is very beneficial to the industry. The current industry is too impetuous and has too many bubbles."

Faced with supervision, small retail investor Wang Shuai chose to sell his shares and cash out.

"The reason why I sold my Bitcoin is very simple. The trading platform is going to be shut down, which basically means I can't play with it anymore." Wang Shuai said, however, he does not rule out continuing to buy and sell Bitcoin in the future, but he will have to trade on overseas platforms.