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Continue: Inquiry is Normal and Exchanges Will Firmly Help Guard against Risk

The inquiry launched by the People’s Bank of China into BTCC, OKcoin and Huobi Bitcoin exchanges on Friday January 6 may be a catalyst for some retracement – a temporary reversal in the direction of a price that goes against the prevailing trend – in the market, said Dominik Weil of Bitcoin Vietnam.

While it is being misconstrued for a ban by some media, the meeting neither mentioned a ban on Bitcoin-related trading nor any other form of restrictive measure on Bitcoin trading itself.

The meeting with the three exchanges that account for 90% of the global Bitcoin trading was meant to remind the exchanges of their need to operate in accordance with the laws and regulations of China and to conduct self-examination. It comes after the price of Bitcoin recorded a wild volatility in a couple of days.

Chinese government’s policy and behaviors are always subtle and important. The “inquiry” in Chinese literally means “to meet and talk”( yue tan 约谈).  In Chinese Stock Exchanges, CEO of companies whose stock price is abnormally volatile or whose capital operation has potential to greatly impact the market like major acquisition and buy-out could be inquired by China Securities Regulatory Commission.  The inquiry in many cases is just a  softened reminding or if any, warning. It can also be the initial stage of an investigation in some cases, though.

According to Caixin, China’s top financial news media, PBOC has told the threes exchanges that the devaluation of yuan should not be mentioned in their promotions and  has reiterated the importance of Anti-money Laundering Law of China. Furthermore, PBOC said the three exchanges should not conduct off-line promotions in China. Specifically, PBOC has warned BTCC that fake trading records(machine transactions) shall not happen again.

In a short statement from BTCC regarding the announcement, the Chinese exchange which touts itself as the longest running in the world, notes that the meeting with the PBOC was not the first of its kind and that the press release issued only outlines the significant volatility in Bitcoin trading and a reminder that the digital currency does not have a legal tender status.

In the announcement of BTCC, it reads:

BTCC has participated the meet-up with PBOC and Financial Office of Shanghai. It has introduced the current status of BTCC. BTCC will operate strictly in accordance with Chinese laws and regulations as it has long been done. BTCC will actively conduct self-examination and correction of any irregularity. BTCC will firmly help government to uphold market stability and guard interests of investors. BTCC’s reminder:In accordance of Joint Notice of People’s bank of China, Ministry of Industry and Information, China Securities Regulatory Commission China Banking Regulatory Commission on Bitcoin Risk Prevention, Bitcoin is a specific virtual goods. It is not law-based and compulsory like currency thus does not have the legal status as a currency. It shall not, should not be circulated as a currency in the market. Individuals and agencies should properly treat virtual goods and virtual currency. They should invest with rationale in Bitcoin and thus bear the possible risks by their own.

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Some people think the inquiry should not be overstated and over interpreted.

In an email to 8btc, Weil says :

“the news is probably more like a  a catalyst for some retracement(cooldown) of an overheated market anyway. The price surges we have seen over the last 2 weeks have been quite exaggerated. We might see now some days/weeks of a more stable price development,” he stated. We are also in regular exchange with officials of the State Bank of Vietnam in order to bring our industry insights to the table while making sure we are in compliance with all applicable laws and regulations. I think this is just the natural state of things if you are serious about building a long-term perspective for your business.”

Please follow 8btc news for more interpretations of Chinese policies on Bitcoin.

COMMENTS(28)

  • d0wnm3
    1 week ago d0wnm3

    Zerohedge is not a serious news source

  • gfunksound
    1 week ago gfunksound

    So how likely is it that China will ban btc? They are already pushing out their own digital yuan shitcoin. How likely will they allow Bitcoin as competition once they have their own crypto in the game? Not damn likely if you ask me. Since China is the biggest factor in btc price, this could be pretty bearish for btc. Black Swan maybe?

    • etheraddict77
      1 week ago etheraddict77

      Black-swan usually happen within days. This will be like a slow-fuse bomb blowing up in their face now that exchanges can no longer manipulate prices upwards

  • cowtung
    1 week ago cowtung

    One of two things will happen.

    1) They give lip service to cracking down and, as before, turn a blind eye.
    2) They actually crack down, driving the bitcoin market underground, where they can’t watch it as closely. People will start using actual cash to buy bitcoin. Cash withdrawals will be restricted (if they aren’t already). They’ll eventually have to pull an India and start banning cash.

    In either scenario, bitcoin/crypto wins. Only differences are how many and who end up in jail first and the time frames. Also, they could do number 1 for a few more years, maybe play the market for another cycle or two, and spring number 2 on us when bitcoin hits $10k or whatever.

  • btcclassicvsbtcxt
    1 week ago btcclassicvsbtcxt

    Loose lips sink ships.

  • Fuyuki_Wataru
    1 week ago Fuyuki_Wataru

    It will die off slowly.

    I call it the last dance, basically the price rises back up (like it just did to 940’ish) and then slowly starts reaching lower lows and lower highs. Basically the rise we had in December, but then reversed. No hard sell-offs, just slow sliding down the hill, coupled with a few major dumps here and there.

  • etheraddict77
    1 week ago etheraddict77

    I think the timing is curious. They crack down on BTC the year they introduce their own currency? They may have known about BTC being used as a tool to circumvent capital controls for some time but governments work slowly and maybe they did not have a task force in place to deal with such things. Either way, now exchanges can no longer fake their volumes and price will eventually decline. That money will flow into altcoins

  • Mr_Yukon_C
    1 week ago Mr_Yukon_C

    bitcoin hits $10k or whatever

    Bitcoin isn’t hitting $10k…ever.

    Every time I see that number (or something close to it) tossed around, the more I’m convinced it will never happen.

  • Mr_Yukon_C
    1 week ago Mr_Yukon_C

    Zerohedge is not a serious news source

    You can just stop now.

    ZH is very pro-BTC and they routinely provide their sources. So I guess their sources are “fake” too? lol

    Plus, plenty of other sources are also talking about this.

    Basically, if you are skeptical or disagree with it, then it’s just “fake”?

    cc: /u/etheraddict77

  • pandoras_sphere
    1 week ago pandoras_sphere

    It sounds like what they really need is a pegged CNY token, and a decentralized exchange. The pegged CNY token can be sold by the black market in meatspace with venders marking it up a percent or two.

    The decentralized exchange, such as EtherDelta can be used to put it in anything else.

    Anti wage laundering schemes for legit businesses; even on the blockchain, seems easy to manage. Anti-money laundering schemes for existing wealth seems impossible.

  • user2213
    1 week ago user2213

    Damn Yukon is on a roll.. http://i.imgur.com/GQcpL25.png

    • Mr_Yukon_C
      1 week ago Mr_Yukon_C

      Ha!

      Well, I’m no ZH apologist. But the fact is, they have been very pro-BTC over the years.

      So for them to be reporting on this, it’s hardly “not serious” or “fake”. Especially in light of all the other places essentially reporting the same news.

  • etheraddict77
    1 week ago etheraddict77

    I happen to agree that ZeroHedge is not a good source but they are quoting reliable sources and I have seen the Bloomberg terminal myself when it was circulating. ZH accurately predicted that this would happen, spot on is what I would call it.

    Anyway, there is more stuff coming out next week count on it, be prepared for a wild run in Bitcoinland

  • Dave_the_Pigeon
    1 week ago Dave_the_Pigeon

    Recently attended a blockchain summit in SV, the event was basically an expose of cutting edge blockchain tech for Chinese investors. At least 70% of the attendees were Chinese nationals, a handful of mayors and finance officials even showed up and spoke. China is by no means shying away from the blockchain or BTC space.

  • Piranhax
    1 week ago Piranhax

    “The timing!” This is twice now a negative news article is put out about “China and BTC” , whenever BTC gets its legs. This is an blatant to attempt at suppression for whatever reason.

  • spgrk
    1 week ago spgrk

    If governments ban cryptocurrencies they may not be able to eliminate them, but they can certainly cause the price to crash.

  • cowtung
    1 week ago cowtung

    This latest “crash” was just a correction after it heated up too quickly. The price may very well go back to $200 if China starts putting people in jail and killing off exchanges, but you can be sure that workarounds will evolve and the price will slowly recover as they do.

  • latetot
    1 week ago latetot

    The biggest impact is the end of the fake trades- the chinese exchanges could always fake positive price ticks by trading with themselves. This is illegal in the US because it make it so easy to manipulate the price.

  • hodlor
    1 week ago hodlor

    I don’t think bitcoin wins if there’s a crackdown.

    China has a trump card: shutting down every bitcoin miner in their country. Would it kill bitcoin? I doubt it. Would it kneecap bitcoin? Yeah. Oh, yeah.

  • hodlor
    1 week ago hodlor

    In the years to come, this is going to be a running joke.

  • hodlor
    1 week ago hodlor

    Bitcoin has competitors now. I don’t think it can lose 4/5 of its value now and maintain its status as the #1 crypto.

  • Move_Crypto
    1 week ago Move_Crypto

    80% of the BTC trade volume used to be denominated in $ on an exchange based in Tokyo.

    650k BTC was hacked from there and BTC still lives on.

    Even if China completely banned BTC (unlikely), people in China would still use BTC and there would still be 6B internet users located in other countries.

  • Move_Crypto
    1 week ago Move_Crypto

    This must be the 10th time China has “cracked down” on Bitcoin

    What if the Chinese exchanges, representatives from PBOC, and crypto news outlets are all profiting from big short positions every time China “bans” BTC?

  • hl5460
    1 week ago hl5460

    Chinese government’s policy and behaviors are always subtle and important. The “inquiry” in Chinese literally means “to meet and talk”( yue tan 约谈).  In Chinese Stock Exchanges, CEO of companies whose stock price is abnormally volatile or whose capital operation has potential to greatly impact the market like major acquisition and buy-out could be inquired by China Securities Regulatory Commission.  The inquiry in many cases is just a  softened reminding or if any, warning. It can also be the initial stage of an investigation in some cases, though.According to Caixin, China’s top financial news media, PBOC has told the threes exchanges that the devaluation of yuan should not be mentioned in their promotions and  has reiterated the importance of Anti-money Laundering Law of China. Furthermore, PBOC said the three exchanges should not conduct off-line promotions in China. Specifically, PBOC has warned BTCC that fake trading records(machine transactions) shall not happen again.http://news.8btc.com/continue-inquiry-is-normal-and-exchange-will-firmly-help-guard-against-risk

  • hl5460
    1 week ago hl5460

    Quote from: Yakamoto on Today at 04:30:46 AM
    God this just gets funnier and funnier by the day.The PBOC is taking this in one of the worst ways I have seen in a long time. Maybe it’s a strategy, but the constant devaluation of the Yuan just makes this insane to think about. Every single worker within China just keeps getting screwed, their previous wealth constantly loses value, and it’s a terrible situation. No wonder the rich are getting their money out of China and into western countries.

    This is just a warning. There could be more substantial measures to tighten the control.

  • Yakamoto
    1 week ago Yakamoto

    God this just gets funnier and funnier by the day.The PBOC is taking this in one of the worst ways I have seen in a long time. Maybe it’s a strategy, but the constant devaluation of the Yuan just makes this insane to think about. Every single worker within China just keeps getting screwed, their previous wealth constantly loses value, and it’s a terrible situation. No wonder the rich are getting their money out of China and into western countries.

  • Denker
    1 week ago Denker

    Quote from: Yakamoto on Today at 04:30:46 AM
    God this just gets funnier and funnier by the day.The PBOC is taking this in one of the worst ways I have seen in a long time. Maybe it’s a strategy, but the constant devaluation of the Yuan just makes this insane to think about. Every single worker within China just keeps getting screwed, their previous wealth constantly loses value, and it’s a terrible situation. No wonder the rich are getting their money out of China and into western countries.

    This is not just happening in china as we all know.Devaluation of currencies is happening in almost every country.Of course some do it in a rapid and massive scale compared to others.And the true inflation is much higher than what we get told.This will not end well.However until the worst point is reached the banks and governments will pull out some more tricks to delay the inevitable and to safe at least their own butts and only the small men and women will have to suffer.

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