China tightens curbs on bitcoin trade

Wed Dec 18, 2013 6:54am EST
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By Adam Rose

BEIJING (Reuters) - A Chinese bitcoin exchange platform announced on Wednesday that it had stopped taking Chinese yuan deposits, sending the price of the virtual currency down sharply as China broadened its crackdown on domestic bitcoin trading.

Shanghai-based BTC China, the world's largest bitcoin exchange by volume, posted a notice about the new regulations on its website, two weeks after Beijing banned financial institutions from trading in bitcoin, due to the risks involved.

"Due to new government regulations, BTC China will temporarily suspend CNY deposits. BTC deposits/withdrawals and CNY withdrawals are not affected, and will continue to operate in the interim," BTC China said in the notice.

The platform could no longer handle new deposits because its third-party payment provider had abruptly cut off service, said Chief Executive Bobby Lee.

"It was disconnected against our will," said Lee, adding that BTC China had switched to the provider on Sunday as a precautionary measure.

On Tuesday, the Chinese Business News reported that the government had asked third-party payment services to stop handling bitcoin transactions.

It was not immediately clear whether other exchange platforms were affected.

The yuan-bitcoin exchange rate on BT China has dropped 46 percent from Monday, and 60 percent since a peak on December 1. The exchange rate on rival platform has fallen 70 percent from its November 30 peak.   Continued...

One of Bitcoin enthusiast Mike Caldwell's coins in this photo illustration at his office in Sandy, Utah, September 17, 2013. REUTERS/Jim Urquhart