Bitcoin Prices Slump After China Cracks Down On Exchanges

Bitcoin Prices Slump After China Cracks Down On Exchanges
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Chinese regulators have apparently ordered Chinese banks to shut down the accounts of bitcoin exchanges. According to CoinDesk, banks have sent shutdown notices to several of China’s top exchanges, including BTCTrade, BTC100 and Huobi. The site notes that it appears Chinese banks began shutting down the accounts of the smaller bitcoin exchanges before moving up to those with bigger trading volumes.

Warning signs for bitcoins

We’ve been hearing murmurings that Chinese banks would be ordered to close the accounts of bitcoin exchanges. However, those rumors had not been confirmed until now. So far all of the announcements have come directly from the banks. China’s central bank has not given any written announcement to bitcoin exchanges.

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Exchanges are expected to stop recharging through bank accounts by April 15. However, BTC China said it would not be changing any of its arrangements for banking until regulators give them an official notice. Another exchange, BTC38, suspended funding through bank deposits earlier this month. FXBT and OKCoin have already halted some funding options for accounts after their banks and payment processing companies notified them. However, they said they would keep trading after April 15.

Bitcoin community not worried

In spite of the confirmation of the previous rumors, many bitcoin enthusiasts do not seem worried. OKCoin said it would focus on expanding and possibly establish offices overseas, moving its servers over there if it needed to do so. BTCTrade also said it would expand overseas and plans to open services in U.S. dollars very soon. The company has already set up a Japanese version of its site as well.

Bitcoin exchanges have found ways to get around restrictions placed on t hem, allowing customers to move their money into and out of them without being able to directly access accounts. Some exchanges have used third-party payment processors, prepaid cards and even a voucher system.

Other virtual currencies affected by bitcoin

Around the time the exchange did that, the prices of several other digital currencies declined by at least 20%. Megacoin and TAG coin were the worst-hit by the declines, falling by about 50%, while quark prices declined 40% and dogecoin prices fell 25%. Litecoin also fell, even though it isn’t considered to be an alternative coin in China, falling by more than 20%.

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