Chinese Bitcoin Exchanges Suspend Some Money Transfer Services

BTC China and OKCoin, two of China’s largest Bitcoin exchanges, suspended some money transfer services, after it was reported that the central bank tightened controls on the digital currency.

BTC China said that services with Yijingdong had been suspended “because of reasons to do with” the payment provider, according to a statement on its official microblog yesterday. OKCoin said third-party payment companies have also suspended services to its clients.

Bitcoin prices plunged almost 10 percent on March 27 after Caixin reported that the People’s Bank of China ordered banks and payment companies to close the trading accounts of more than 10 exchanges. The deadline was April 15, according to the report, which cited a notice sent to banks and third-party payment companies.

“We have prepared an emergency plan ahead of the April 15 deadline and will launch an overseas version soon,” said OKCoin, which described itself as the biggest virtual currency trading center in China. “Please don’t doubt us.”

The price of Bitcoin, which exists as software and isn’t controlled by any country or banking authority, fell to 2,525 yuan ($407) on BTC China as of 5:28 p.m., from a 24-hour high of 2,710 yuan.

Halt Payment

Customers of Bitcoin exchanges pay for the currency through accounts with service providers similar to EBay Inc.’s PayPal.

Transferring money into trading accounts, known as charging, through banks and using BTC China’s vouchers haven’t been affected, it said in its statement.

“We aren’t the first exchange to halt charging and we won’t be the last,” OKCoin said on its microblog today. “We haven’t received any notices from banks but we’re not ruling out the possibility.”

BTC38.com and FXBTC, two other Bitcoin platforms, also made announcements since yesterday about halts to charging services.

PBOC has sought to limit dealings in Bitcoin that may be used to launder money or evade capital controls, issuing a notice on Dec. 5 barring financial institutions and payment companies from buying and selling Bitcoin or dealing in linked products. In a March 21 statement on its microblog, the PBOC denied unspecified media reports that it had banned Bitcoin trading.

Bitcoin has been hard hit since Tokyo-based exchange Mt. Gox, once the world’s largest, halted withdrawals on Feb. 7, sending prices tumbling more than 8 percent. The exchange filed for bankruptcy weeks later after about $470 million in Bitcoins belonging to its customers and the firm disappeared from its registries. Prices dived by about 36 percent from their intraday high immediately after the PBOC notice on Dec. 5.

To contact Bloomberg News staff for this story: Stephen Tan in Beijing at ztan39@bloomberg.net

To contact the editors responsible for this story: Gregory Turk at gturk2@bloomberg.net Tan Hwee Ann

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.