China dealt bitcoin and cryptocurrency trading a major blow on Monday (Feb. 5) after it blocked all websites that enable cryptocurrency trading and initial coin offerings (ICOs).
According to news from The South China Morning Post, China also blocked foreign platforms that enable bitcoin trading in its effort to kill the cryptocurrency market in China altogether.
“To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs,” said an article published on Sunday night (Feb. 4) by Financial News, a publication affiliated with the People’s Bank of China, reported the South China Morning Post. “ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions. Overseas transactions and regulatory evasion have resumed … risks are still there, fueled by illegal issuance, and even fraud and pyramid selling.”
The move on the part of China is designed to put an end to bitcoin trading and ICOs in China, which took off as investors maneuvered to get into the market. Because of interest on the part of retail investors, the price of bitcoin has been very volatile, recently slumping after hitting a high of $20,000 last year.
In January, China stepped up its regulation of cryptocurrency exchanges by going after online platforms and mobile apps. Citing people familiar with the matter, Bloomberg reported at the time that China’s regulators are eyeing internet-based platforms and mobile apps that provide customers with exchange-type services. Last year, Chinese authorities banned trading in cryptocurrencies, but recently the country has been seeking out alternative venues.
Chinese regulators want to block people in the country from accessing offshore and homegrown platforms that enable trading. The sources couldn’t provide more details about the types of policies China will implement to hinder access to these platforms. The government is also going after companies and individuals who enable cryptocurrency trading by providing services such as market making, settlement and clearing. However, small peer-to-peer (P2P) trades aren’t on the radar of the Chinese government.