Crypto prices dive as China shuts exchanges

Crypto prices dive as China shuts exchanges

According to leaked documents and a series of statements from those running the local exchanges, China's regulators have told the exchanges verbally that they do not have a license to operate and must shut down immediately.

The nosedive comes after reports claim China plans to stop exchange trading of cryptocurrency by the end of September.

The Bitcoin has gone on a tailspin in India, falling much faster that elsewhere in the globe, after a China crackdown on crypto-currencies and public remark by an Reserve Bank of India (RBI) official, trashing the digital currency. The outlet does not say when the exchanges must close their operations, but there are several indications that the set date is September 30. In the end, Bitcoin's value is tied to confidence that its users place in technology, and there's no shortage of dreamers that have put their faith cryptocurrency being the future of monetary exchange.

"China is preparing to provide licensure for less than a handful of exchanges as it grapples with the meteoric increase in cryptocurrency trading, and speculation on ICOs - licensure and engagement with government will help propel this industry forward".

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The writing was on the wall when The Wall Street Journal reported on Monday that the Chinese government meant to shut down bitcoin exchanges after banning ICOs the previous week. NIFA also said that cryptocurrencies had no legal base of foundation in China. Digital currencies developed by authorities could be used for good, with the right regulation, he said. Chinese business news magazine Caixin estimates that Chinas share of total global bitcoin tradingvolume peaked at around 90 percent.

The Internet finance association was set up by China's central bank, and according to Reuters, it "urged members to abide by Chinese laws and not deal in cryptocurrencies". The real reason is believed to be BTCC's recently launched cryptocurrency ICO platform, shut-down of which made the parent company undergo some changes as well. For example, four of the world's largest Bitcoin mining operations are based in China. As bitcoin exchanges in the country close up shop for yuan trading, that percentage will drop sharply.

Cryptocurrency is a new market, and governments are still struggling to figure out how to regulate this new store of value.