Thursday, April 03, 2014

Bank of China Shutting Down Bitcoin Exchanges ABefore April 15 Deadline

China may be tightening the noose around Bitcoin: two exchanges dealing in the virtual currency have been forced to suspend bank transfers from customers depositing yuan to buy bitcoins.

On Thursday, local exchange FXBTC said several banks had ordered it to close accounts used for taking customer deposits, due to tightened regulations from China's central bank. Now all commercial banks and third-party payment platforms have been ordered to close all related services tied to bitcoin transfers, the exchange said in on its website.

Hours before, another exchange, BTC38, issued a similar notice, and said due to the "influence from China's central bank" the site had been forced to revoke deposits via bank transfer. In the interim, the exchange can still accept withdrawals in Chinese yuan.

Last month, the bitcoin exchanges were put on alert when the publication Caixin reported that the nation was tightening regulations covering the virtual currency. By April 15, the nation's central bank would require all banks and third-party payment companies to close accounts operated by bitcoin exchanges.

But not all exchanges in China are reporting issues. On Thursday, BTCTrade.com said on its website it would temporarily suspend currency transfer over the Internet, but that bank transfers were still accepted.

Another exchange, OKCoin, said its bank transfers were still in operation.

China has been concerned about how to deal with bitcoin, and in December banned banks from trading in the virtual currency. Days later, China's online third-party payment companies began halting services for local exchanges.

In response, the local exchanges began setting up corporate bank accounts that could take direct deposits from customers.

The virtual currency was once rising in popularity in China. But the nation's government is concerned with Bitcoin's lack of central monetary authority, and its potential use for laundering money. Nonetheless, the government has said consumers are free to buy bitcoins.

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