Chinese Bitcoin Exchange Withdrawal Services Show Signs of Recovery After Frozen Period

It has been a month since Chinese Bitcoin exchanges announced a complete freeze on withdrawal and transfer services under the new anti-money laundering policy regulations issued by the People's Bank of China .

According to a representative of a Chinese bitcoin exchange, the exchange has been in dialogue with the People's Bank of China on relevant policies. The main responsibilities of the People's Bank of China are to formulate and implement monetary policies, prevent and resolve financial risks, and maintain financial stability.

The People's Bank of China has issued new policies on anti-money laundering. Image source: Golden Finance

Chinese Bitcoin exchanges said that there is another issue under discussion: the implementation of KYC (know your customer) rules when unfreezing transfer services.

According to Chinese bitcoin exchanges, the conversation is between two different camps, with the central bank siding with those in favor of stricter rules to regulate the trading process. Roland Sun, legal director of the China Ledger Alliance, revealed that the KYC proposal has “not yet been approved” by the central bank.

After a turbulent year last year, China’s bitcoin startup scene has looked pretty quiet lately.

At the beginning of this year, when the price of Bitcoin fluctuated greatly, the central bank issued a series of requirements to regulate Bitcoin startups. Not only that, but there was also a series of talks that followed. In February, Chinese Bitcoin exchanges reached an agreement and announced that they would suspend transfer and withdrawal services for one month until the problem was resolved.

Central bank officials subsequently publicly stated that they hope exchanges will improve existing systems and formulate stricter KYC and anti-money laundering (AML) rules. The first key is to report suspected capital flight and money laundering to the government.

Central bank officials hope that exchanges will improve their systems and develop stricter KYC and anti-money laundering rules. Image source: Golden Finance

On the other hand, Chinese bitcoin exchange investors have turned to trading on P2P (peer-to-peer) platforms or directly in private transactions. In March, the exchange announced that it had completed all the updates, hoping that this move would facilitate the decision-making process, which they hope will be made after the main regulatory meeting.

Although the result is still delayed, representatives of some Chinese exchanges are still optimistic about it. They said that the official decision will be announced soon, and the withdrawal and transfer services will be unfrozen at that time. Even if it is later than expected, it is not far from the unfreezing time.

“The results will be out before the end of the first half of this year,” said Zhou Shouji, who runs OTC (over-the-counter) trading firm Financial Technology Blockchain Group.

Representatives of other Chinese bitcoin exchanges also said the results would be out soon, although none provided an expected timeline.

Apart from this, the rest of the Bitcoin ecosystem is showing good momentum. An exchange event will be held in Chengdu in June this year. In addition to some local blockchain startups, BTCC and OKCoin are also scheduled to attend the event.