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In a surprise turn of events, the two largest Chinese Bitcoin exchanges have suspended Bitcoin and Litecoin withdrawals for one month. The news follows China’s central bank inspections at nine smaller Bitcoin exchanges this week.
China’s Central Bank Continues to Shake Up the Bitcoin Market
Over the past few weeks, Bitcoin spectators have been closely watching Chinese exchanges make significant changes. The People’s Bank of China (PBOC) has been inspecting the country’s Bitcoin exchanges looking for issues with regulatory compliance such as money laundering. So far the top three exchange platforms have ceased margin lending practices and have also added fees to every Bitcoin trade.
Now, this week the PBOC has visited with smaller exchanges within the region including Chbtc, Haobtc, Btctrade, Yunbi, BTC100, Dahonghuo, Jubi, Bitbay, and Yuanbao. The initial visits had caused the price to drop a touch but quickly rose back to the $1070 range on February 8. The following day on February 9 the exchanges Okcoin and Huobi announced they would suspend BTC and LTC withdrawals for one month which subsequently caused the Bitcoin price to drop 10 percent.
Both companies have stated their exchanges will be “upgrading” in order to comply with “anti-money laundering efforts, foreign exchange management and other financial laws and regulations.” The pausing of withdrawals and the upgrades are expected to last one month but “may also be substantially ahead of the development process,” says Huobi’s announcement. This “in order to avoid possible illegal transactions that may continue before the system upgrade is complete,” Huobi’s announcement concludes.
OKCoin, Huobi: will upgrade AML system according to laws & regulations, pausing BTC LTC withdraw during the upgrade. Estimated time: 1 month
— cnLedger (@cnLedger) February 9, 2017
Avoiding ‘Illegal Transactions’ Until Upgrade Completes
The third leading Chinese Bitcoin exchange BTCC which has been the most vocal exchange so far, has not made an announcement suspending withdrawals. Currently, the fiat value of Bitcoin rests at $980 per BTC, and the price has fluctuated quite a bit throughout the morning of February 9. Huobi says the suspension will stay in place to avoid any misconduct until their newly designed system is perfected.
What do you think about Okcoin and Huobi suspending BTC and LTC withdrawals in order to upgrade? Let us know in the comments below.
Images courtesy of Shutterstock, and Zeroblock
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