The three major Bitcoin platforms may charge fees for illegal financing and currency lending in the future (1)

Three major Bitcoin platforms violated regulations in raising funds and lending coins

Withdrawal fees and "leverage" service fees are the main profit models of domestic Bitcoin trading platforms

As the countdown to Bitcoin deleveraging begins, executives of Bitcoin platforms are reluctant to speak out as they await the latest moves from regulators. Last night, regulators released their latest investigation results.

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Bitcoin China operates beyond its scope

Last night, the relevant person in charge of the Shanghai headquarters of the People's Bank of China released the results of the recent on-site inspection of "Bitcoin China", reminding institutional and individual investors to pay close attention to the risks and hidden dangers of the platform and safeguard their own property safety. The person in charge said that the preliminary inspection found that the "Bitcoin China" trading platform had problems such as operating beyond the scope of business, illegally carrying out margin trading business, and investors' funds not being deposited by a third party. Institutional and individual investors should pay close attention to the risks and hidden dangers of the platform and safeguard their own property safety.

The Business Management Department of the People's Bank of China announced yesterday that since the joint investigation team entered "Bihang" and "Huobi.com", it was initially found that these Bitcoin trading platforms violated regulations in conducting margin trading and securities lending business, resulting in abnormal market fluctuations. In addition, these platforms have not established relevant anti-money laundering internal control systems in accordance with regulations. Bitcoin China's Bitcoin price plunged upon hearing the news. As of 10 o'clock last night, the price of the currency fell below the 6,000 yuan mark, and fell to a minimum of 5,700 yuan.

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Regulatory investigation drawing to a close?

The three major domestic bitcoin trading platforms - Bitcoin China, Huobi, and OKCoin - have recently taken some "deleveraging" measures, restricting or suspending "financing" and "coin lending" for bitcoin spot.

Bitcoin China announced on its official website that it would suspend the provision of loan and coin lending services from January 12, 2017. Although Huobi.com and OKCoin.com did not post any announcements on the suspension of financing and coin lending on their official websites, their customer service staff confirmed the relevant "deleveraging" measures. Some Huobi.com investors were unable to borrow money on their trading pages a few days ago. The staff on the other side said that it was because the (total) leverage quota of the platform was full and they could just wait for others to repay. This means that Huobi.com has limited the total leverage quota of the platform, but allows new "coin lending" and "financing". OKCoin.com's measures are the same as Bitcoin China. Its customer service staff said that "financing" and "coin lending" have been suspended at present, and only repayment (coin) operations can be performed.

In view of the increasingly stringent regulatory measures, the next one is likely to be related to deleveraging. As for the specific measures and severity, the industry is generally in a wait-and-see state and is unwilling to talk more. An executive of a Zhongguancun Bitcoin company told the Beijing Youth Daily reporter that in his personal observation, the regulatory investigation should be nearing its end, and the conclusion of the investigation is likely to be announced in the near future. "The three major exchanges are relatively formal and are unlikely to violate regulations. They all used real-name systems before." He also said, "It is currently a sensitive period, or a countdown. It is unknown what regulatory measures the regulators will take."

The co-founder of another Shenzhen Bitcoin company said, "I agree that this year is the first year of Bitcoin regulation, but it is hard to speculate what the deleveraging measures will be."

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Bitcoin will determine the new direction

In addition to the new measures for Bitcoin regulation, the market is also paying attention to another international hot topic, namely the impact of the inauguration of the new US President Trump on the entire capital market on January 20. Earlier on the early morning of January 12, US President-elect Trump held his first press show in New York. At that time, US stocks fell under pressure, the US dollar experienced a roller coaster market, and spot gold and silver rose in the short term, with gold breaking through the $1,190/ounce mark.

Market analysts said that the current price of Bitcoin is still stable in the rising channel, and technical indicators have confirmed that the rise will continue. The article said that the US dollar will continue to weaken as traders are waiting for the uncertainty brought to the market by Trump's inauguration. To make matters worse, global market risks may increase due to the strong Brexit policy of the United Kingdom, as British Prime Minister Theresa May's speech also encouraged consumers to seek returns in digital cryptocurrencies rather than stocks or bonds. The article said that these uncertainties may make traders continue to be optimistic about Bitcoin, especially since China's restrictions seem to have slowed down.