Bitcoin falls after report claims China orders exchanges to shut


Los Angeles • Bitcoin fell as much as 7.3% in the US after a report claimed Chinese regulators ordered the nation’s digital exchanges to close, the second blow to the US$150 billion (RM630 billion) cryptocurrency market after the country earlier last week outlawed initial coin offerings (ICOs).

A document has been issued for local Chinese regulators to implement the shut-down, Caixin reported last Friday, citing unidentified people close to the nation’s internet financial risk prevention team. Earlier, bitcoin prices dropped 18% on the Chinese trading platform

It wasn’t immediately clear how the order is being conveyed to bitcoin exchanges in China. Wu Xing, a spokes-woman for Huobi, said the company hasn’t received such notices and is still in operation. Tian Ying, a spokeswoman for Okcoin, said the company hasn’t received such notices to shut down its exchange either.

Bitcoin fell 3.9% to US$4399.54 as of 11:05am in New York last Friday, according to Coinbase.

The People’s Bank of China said on its website last Monday that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalising legal violations in ones already completed. The regulator said that those who have already raised money must provide refunds, though it didn’t specify how the money would be paid back to investors.

Digital startups use ICOs to raise money to fund their development and to create digital coins that are necessary to access the applications they are building. More than US$2 billion has been raised through ICOs this year, according to Autonomous Research LLC.