Big China’s Bitcoin companies block withdrawals after Central Bank talks

8 years ago - Published in Finance, Fintech Land, Technical Analysis

Two of China's most widely used bitcoin exchanges have announced that they will suspend bitcoin and litecoin withdrawals for one month effective immediately.

In public posts that showcase the increasingly coordinated nature of exchange policy in the region, both OKCoin and Huobi said on Thursday that the move was a bid to bolster their anti-money laundering (AML) capabilities and prevent "illegal transactions". In the case of OKCoin, only it's OKCoin.cn portal is affected.

Conversion to and from the yuan is not affected and the curbs will be dropped after updates to compliance systems, the exchanges said.
The announcements followed Wednesday's meeting between the People's Bank of China and the bitcoin exchanges.

Then, BTCC announced that it would also upgrade its internal systems. In the meantime, the exchange said, bitcoin and litecoin withdrawals will take 72 hours to process.

All three platforms said they would upgrade their systems in order to "prevent and attack the exploitation of bitcoin for money laundering, foreign exchange conversion, pyramid schemes and other illegal behaviour” OKCoin and Huobi estimated the upgrades would take one month to complete. 

All told, the move comes amid a rocky period for local exchanges that began with the wider scrutiny of major bitcoin exchanges by the People's Bank of China (PBOC), the country's central bank.
Chinese exchanges also adopted trading fees, leading to a dramatic reduction in local trading volume. Previously, Chinese exchanges had handled nearly 90% of bitcoin transactions thanks in part to their rock-bottom trading fees. 

Following in the footsteps of China's 'Big Three' exchanges, smaller competitors BTC Trade, BTC100, CHBTC, Dahonghuo, Yuanbao and BitBays all moved to impose or increase trading fees yesterday.

China has taken a central role in the bitcoin market in recent years as its citizens became leading traders and miners, who deploy the vast computing power needed to make transactions with the cryptocurrency possible.