China's top regulators ban crypto trading and mining, bitcoin tumbles

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SHANGHAI/LONDON, Sept 24 (Reuters) - China's most powerful regulators on Friday intensified the country's crackdown on cryptocurrency with a blanket ban on all crypto transactions and mining, hitting bitcoin and other major coins and pressuring crypto and blockchain-related stocks.

Ten agencies, including the central bank as well as banking, securities and foreign exchange regulators, vowed to work together to root out "illegal" cryptocurrency activity, the first time the Beijing-based agencies have joined forces to explicitly ban all cryptocurrency-related activity.

China in May banned financial institutions and payment companies from providing services related to cryptocurrency transactions, and issued similar bans in 2013 and 2017. The repeated prohibitions highlight the challenge of closing loopholes and identifying bitcoin-related transactions, though banks and payment firms say they will support the efforts.

Friday's statement is the most detailed and comprehensive yet from the country's most powerful regulators, underscoring Beijing's commitment to suffocating the Chinese crypto market.

"In the history of crypto market regulation in China, this is the most direct, most comprehensive regulatory framework involving the largest number of ministries," said Winston Ma, NYU Law School adjunct professor.

The move comes amid a global cryptocurrency crackdown as governments from Asia to the United States fret that privately operated highly volatile digital currencies could undermine their control of the financial and monetary systems, increase systemic risk, promote financial crime and hurt investors.

They also worry that "mining," the energy-intensive process through which bitcoin and other tokens are created by high performing computers, is undermining global environmental goals.

Chinese government agencies have repeatedly raised concerns that cryptocurrency speculation could disrupt the country's economic and financial order, one of Beijing's top priorities.

Analysts say authorities also see cryptocurrencies as a threat to China's own sovereign digital-yuan, which is at an advanced pilot stage.

"China has been known to go to extremes with either very assertive statements and prosecutions to complete radio silence," said George Zarya, CEO of Bequant crypto exchange in London.

"This time the point was made very clear that China will not support cryptocurrency market development as it goes against its policies of tightening up control over capital," he said.

The People's Bank of China (PBOC) said cryptocurrencies must not circulate and that overseas exchanges are barred from providing services to mainland investors. It also barred financial institutions, payment companies and internet firms from facilitating cryptocurrency trading nationally.

The Chinese government will "resolutely clamp down on virtual currency speculation, and related financial activities and misbehavior in order to safeguard people's properties and maintain economic, financial and social order", the PBOC said.

Bitcoin , the world's largest cryptocurrency, dropped more than 9% to $40,693 on the news, having earlier been down about 1%.

Smaller coins, which typically rise and fall in tandem with bitcoin, also tumbled. Ether fell 10% while XRP dropped a similar amount. read more

Friday's statement comes after cabinet vowed in May to crack down on bitcoin mining and trading as part of a broader effort to mitigate financial system risks, without going into details. That threat sent cryptocurrencies tumbling, with bitcoin alone slumping 30% in a day. Friday's news dashed hopes among many in the industry that the May crackdown would be short-lived.

"This is the manifestation of the crypto mining and trading crackdown announcement by China’s central government back in May," said Ma.

The move also hit cryptocurrency and blockchain-related shares.

U.S.-listed miners Riot Blockchain (RIOT.O), Marathon Digital (MARA.O) and Bit Digital (BTBT.O) slipped between 6.3% and 7.5% in premarket trading. China-focused SOS dropped 6.1% while San Francisco crypto exchange Coinbase Global (COIN.O) fell 3.4%.

"There's a degree of panic in the air," said Joseph Edwards, head of research at cryptocurrency broker Enigma Securities.

"THOROUGH CLEANUP"

Bitcoin and other cryptocurrencies are mined by high-powered computers competing to solve complex mathematical puzzles in an energy-intensive process that often relies on fossil fuels, particularly coal.

The National Development and Reform Commission said that it will work to cut off financial support and electricity supply for mining. Such activities contribute little to China's economic growth, spawn risks, and hamper carbon neutrality goals, it said.

Virtual currency mining had been a big business in China before May, accounting for more than half the world's crypto supply, but miners have been moving overseas. read more

"The losers in all of this are plainly the Chinese. They will now lose around $6 billion worth of annual mining revenue, all of which will flow to the remaining global mining regions," including Kazakhstan, Russia and the United States, said Christopher Bendkisen, head of research at digital asset manager CoinShares.
https://www.reuters.com/world/china/chi ... 021-09-24/

This plus the coming debt ceiling fight in the US congress could make things very interesting.
Facts do not cease to exist because they are ignored.-Huxley
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." ~ Louis Brandeis,

Re: China's top regulators ban crypto trading and mining, bitcoin tumbles

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Not surprising, the Chinese Communist Party can't control it so they ban it. Money and people could be smuggled out of China which they're trying to prevent.
"In the history of crypto market regulation in China, this is the most direct, most comprehensive regulatory framework involving the largest number of ministries," said Winston Ma, NYU Law School adjunct professor.

The move comes amid a global cryptocurrency crackdown as governments from Asia to the United States fret that privately operated highly volatile digital currencies could undermine their control of the financial and monetary systems, increase systemic risk, promote financial crime and hurt investors.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: China's top regulators ban crypto trading and mining, bitcoin tumbles

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WTF? Why so? I'm glad I'm not from China. In my opinion, crypto is the future that awaits us. I am sure that there will be no currency in many years but only cryptocurrencies. Why ban the main source of money for many people today. If we look at the statistics, many millionaires are investors in cryptocurrencies. I would like to be one of them in the future, and I am sure that this goal will be fulfilled. I am making great strides towards such a result. I recently started making my first crypto startup with the blockchain found on https://bhero.com. I hope everything will be fine.
Last edited by Richardtij on Mon Jun 06, 2022 5:58 pm, edited 1 time in total.

Re: China's top regulators ban crypto trading and mining, bitcoin tumbles

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Richardtij wrote: Sat Jun 04, 2022 6:36 am It is funny that they are banning crypto, but they have a national cryptocurrency which is an electronic currency for the Yuan
Ban your competition.
Facts do not cease to exist because they are ignored.-Huxley
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." ~ Louis Brandeis,

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