China steps up its regulation of cryptocurrency trading by going after online platforms and mobile apps.
Citing people familiar with the matter, Bloomberg reported 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 cryptocurrency trading venues. Chinese regulators want to block people in the country from accessing offshore and homegrown platforms that enable cryptocurrency trading. The sources couldn’t provide more details about the types of policies China will implement.
The government is also going after companies and individuals who enable cryptocurrency trading by providing services such as market making, settlement and clearing. Small peer-to-peer (P2P) trades aren’t on the radar of the Chinese government. News of the country’s escalated actions sent the price of bitcoin lower in trading. According to Bloomberg, the cryptocurrency was recently down 1.2 percent in London to $13,580.50.
Since last year, China has been clamping down on bitcoin trading, banning exchanges and initial coin offerings (ICOs). Last week, it went after the country’s massive bitcoin mining industry. On orders of a multi-agency task force, regional authorities have been instructed to “actively guide” firms currently mining bitcoin in their region away from the activity, according to documents reviewed by The Financial Times.
The newly minted push to tamp down on mining issues from the fact that the complex computational task required to “mine” bitcoin uses a massive amount of power. As of 2017, electricity demand for bitcoin mining rose to about 20.5 terawatt hours a year, according to BNEF. That equates to more than half the 38 terawatt hours of electricity used annually by the world’s largest miner (as in literal, pull materials out of the ground, mining), BHP Billiton Ltd.