China worries Bitcoin’s world with a ban’s project

Chinese authorities are preparing to shut down the country’s bitcoin exchanges, according to people familiar with the matter, reflecting a growing unease with the virtual currency and its recent surge in value, as multiple Monday reports wrote. 

After Friday’s swirling rumors about Chinese regulators reportedly drawing plans to shut down domestic bitcoin exchanges, the Wall Street Journal reports that China’s central bank has put together a draft of the ban on exchanges after a months-long investigation the cryptocurrency. At the moment, details are thin and reports are only indicating that exchanges based in China, like OKCoin and Huobi would have to cease their operations. It remains to be seen if exchanges outside the country will be blocked by government’s central firewall. This wouldn’t be the first time that the country’s regulators have cracked down on exchanges, but reports indicate that the government is taking the issue quite seriously this time around as the value of bitcoin has skyrocketed in 2017.

A separate report by Bloomberg, also citing similar sources familiar with the PBoC’s crackdown on bitcoin activity who ‘asked not to be named because the information is private’, adds that authorities do not have plans to put an end to over-the-counter transactions where trades aren’t dependent on a centralized exchange. “The government also doesn’t have the power to control” non-commercial trading, the WSJ cited a source as saying.

Two of China's biggest bitcoin exchanges, OKCoin and Huobi, have said they haven't had any instructions to stop trading. China's central bank has also not commented on the reports.

The reported ban comes after China decided to ban initial coin offerings, a hot new way for startups to raise funds by generating their own virtual currency. Sceptics say it's simply an unregulated way for firms to raise money without going through the due diligence required for conventional fundraising methods like venture capital. Beijing described ICOs as illegal fundraising.

China also barred customers from withdrawing bitcoin in February, but it allowed them to resume withdrawals in June.