10 ms·

China is considering shutting down local cryptocurrency exchanges

88 points by stoev 9y ago

blusterXY 9y ago
"China is considering losing all control over domestic cryptocurrency activity"
- yorwba 9y ago
  How does allowing exchanges to operate give them control over domestic cryptocurrency activity? Chinese capital controls are focused on people trying to move their money overseas. If they can't control a certain pathway, they'll rather shut it down completely.
  - xnbv 9y ago
    I have always wondered why they have tolerated it for so long. My theory was that high ranking party members use bitcoin to move their bribes out of the country. On the other hand, high ranking officials might have alternative routes.
  - lostmsu 9y ago
    They can physically seize company's assets, and block bank accounts.
    - tryingagainbro 9y ago
      ...and jail the execs for 20 years in 15 minute trials--including appeals. It's China.
      - jcmoscon 9y ago
        It's communism
        polotics 9y ago
        The powerful corporation that calls itself the "Chinese Communist Party" for old times' sake.
  - blusterXY 9y ago
    Three examples among many: 1. exchanges provide visibility into who is buying and selling crypto along with the ability to integrate crypto activities within real-name systems (i.e. whitelist wallets, etc.). This is the most efficient approach to market regulation as governments simply require exchanges to comply with policies and do not need to code the monitoring infrastructure themselves. 2. exchanges provide an infrastructure for supporting government initiatives -- the Chinese government is developing its own POW-based cryptocoin and has shown an interest in licensing ICOs and taxing transactions. And if China closes down all of the exchanges in the country it is a rather good question how it plans to accomplish either. 3. In the absence of a viable way to operate domestically, Chinese exchanges will simply move overseas (i.e. incorporate in HK), at which point they can continue to serve Chinese customers throughout the world without the need to bother with ANY Chinese policies (such as the elimination of zero-fee trades, KYC policies and data-sharing etc.). What will happen in crypto is exactly the same thing that happened with video-sharing and group-sales: the government crackdown will be used to push uncooperative companies out of the market, and then licensing requirements will be used to tax those companies that remain while ensuring their compliance with the government fintech agenda. The current back-and-forth is part of an intra-government struggle for political primacy over cryptocurrency activities: the reason the big exchanges are silent is because they have their backers and are working to blunt the impact of these policies on their own businesses and the interests of those with whom they are affiliated. Smaller exchanges without this support are screwed and will close, but that is how China works -- it is not a market economy.
madamelic 9y ago
Yeah, because this totally doesn't go against everything cryptocurrencies are (supposed to be) for. If anything, this is a long-term positive sign, I think. I predict this won't work.
- deleted 9y ago
  [deleted]
- tryingagainbro 9y ago
  Depends how badly China wants this stopped. I have a feeling that China is quite a few times worse than IRS--when they want to. Never underestimate what they can do, when they want to.
- deleted 9y ago
  [deleted]
- StavrosK 9y ago
  If there's no way to buy cryptocurrencies, what are you going to do? Unless cryptocurrency starts being widely accepted, it'll be easy for governments to ban it and hard for people to acquire it.
- bsder 9y ago
  It would only fail if there was some inherent flaw in the local currency. And, if that were the case, you would likely have a robust alternative economy denominated in dollars. The Yuan has none of the problems that would allow an alternative currency to really get going. I suspect Chinese bitcoin usage is mostly a bunch mid-level party bureaucrats attempting to transfer wealth outside China so that they can buy tangible assets that can't be seized.
brndnmtthws 9y ago
This seems like fake news. Maybe created in an attempt to manipulate markets? There's a lot at stake. More details can be found here: https://twitter.com/YourBTCC/status/906181802548539393 https://twitter.com/YourBTCC/status/906181802548539393 http://www.allcryptocurrencies.news/bitcoin/bitcoin-crash-of-8-september-due-to-fake-chinese-news/ http://www.allcryptocurrencies.news/bitcoin/bitcoin-crash-of... https://www.reddit.com/r/Bitcoin/comments/6yurbk/what_is_up_mister_btc/ https://www.reddit.com/r/Bitcoin/comments/6yurbk/what_is_up_... https://www.reddit.com/r/CryptoCurrency/comments/6yutr2/am_i_missing_something_markets_tanked_1015_in_a/ https://www.reddit.com/r/CryptoCurrency/comments/6yutr2/am_i... EDIT: Thanks for the downvotes! :)
- danmaz74 9y ago
  It could be fake news, or it could be well founded rumors - with China, it's very difficult to know. EDIT - FWIW: https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bitcoin-exchanges/ https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bi...
- fspeech 9y ago
  This is based on a Caixin report, which is a reputable source. Do you have any reputable source to refute it?
  - fspeech 9y ago
    Caixin report in Chinese: http://m.finance.caixin.com/m/2017-09-08/101142797.html http://m.finance.caixin.com/m/2017-09-08/101142797.html Gist: exchanges are banned, off-exchange one-to-one trades okay.
- vit05 9y ago
  The fact that 4 hrs have passed and still didn't have any official statement is the worst part.
  - fspeech 9y ago
    Caixin reported that this is based on clause 3 of the regulation issued on 9/4.
ploxiln 9y ago
Relevant meme from over three years ago: https://www.reddit.com/r/Bitcoin/comments/23yy37/how_china_sinks_bitcoin_south_park_style_inspired/ https://www.reddit.com/r/Bitcoin/comments/23yy37/how_china_s... (This is not the first time, nor the second time, nor the third time, that we've seen the news "china bans bitcoin" or "china cracks down on bitcoin".)
- ajross 9y ago
  Could be the nineteenth time. This is the logic that BASE jumpers use: I haven't died yet, ergo it's safe. It only needs to crash once. And as basically everyone knows but refuses to acknowledge, the liquidity limitations of all this speculation (i.e. there's nowhere near enough demand to buy up a dropping currency) mean that it'll crash all the way to zero when it does.
  - mark024 9y ago
    great, then I'll buy the whole 16 millions of it, I could not care less about China, I think their presence in bitcoin is bad, as in everything they do, they are not consumers, they are locusts, they are in it only to profit, to make money, I dealt a bit with chinese, eg. wow gold and is a simmilar story, they did more harm to wow with they gold selling than good.
    - ajross 9y ago
      If you aren't exposed to bitcoin currently and view this instability as an opportunity to jump in at the floor of another boom/bust cycle, then that's a good plan (or at least not an insane one). But that logic only works if you aren't exposed to bitcoin. I expect given your tone and defensiveness that this isn't true and that you're holding a ton of coins right now that you'd be pretty upset to find were worth nothing.
      - mark024 9y ago
        I wish I would be holding a lot of coins... even if bitcoins drops 50% is still worth a lot, I know the privileged elitist HN guys hate it for some reason, while probably is saving lives as we speak in Venezuela, but my tone is probably due experience dealing with Chinese, and their efficiency in farming every bit of value form everything they touch, for example their recently started to farm pubg.
bhaak 9y ago
This is really odd. Remember that Chinese exchange are regulated now, after the Chinese government crushed down on them not so long ago. FWIW, BTCChina "has not received any new directives from Chinese regulators" https://twitter.com/YourBTCC/status/906181802548539393 https://twitter.com/YourBTCC/status/906181802548539393 OKCoin and Huobi also haven't got anything https://twitter.com/cnLedger/status/906195967908601856 https://twitter.com/cnLedger/status/906195967908601856
AndrewKemendo 9y ago
Maybe the Chinese government wants even more control and is going to create a centralized exchange and regulate those markets as much as possible. As I stated in a thread last week[1], this seems to be the most plausible move for them. [1] https://news.ycombinator.com/item?id=15176446 https://news.ycombinator.com/item?id=15176446 Don't think for a minute this is China trying to keep investors away from frauds/scams, it's about them making sure they can control capital flows.
rkagerer 9y ago
My gut feeling is there's some truth to the rumour. Related resources: • Original Caixin Report that sparked all this: http://finance.caixin.com/2017-09-08/101142797.html http://finance.caixin.com/2017-09-08/101142797.html • RECOMMENDED - Good English translation / interpretation of above article: https://docs.google.com/document/d/1sNYGpwj3EKkRhlejoycytZLq1OpFpl0bqOtCev0HexY/edit https://docs.google.com/document/d/1sNYGpwj3EKkRhlejoycytZLq... • Shorter English announcement from Caixin: http://www.caixinglobal.com/2017-09-09/101142821.html http://www.caixinglobal.com/2017-09-09/101142821.html • Coindesk article pointing out Caixin has been spot-on in the past (re their Sep 2 leak regarding ICO fundraising): https://www.coindesk.com/report-casts-doubt-future-chinas-bitcoin-exchanges/ https://www.coindesk.com/report-casts-doubt-future-chinas-bi... • Related official news out of China regarding ICO ban: https://www.reddit.com/r/ethtrader/comments/6ywtkt/the_actual_pboc_news_released_today_pertains_to/ https://www.reddit.com/r/ethtrader/comments/6ywtkt/the_actua... • Tweet from CEO of ViaBTC saying "China will shut down all exchanges": https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bitcoin-exchanges/ https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bi... I agree it's not the first time China's cracked down on virtual currency <--> fiat trading, but if true this could be more intense than their prior efforts.
arisAlexis 9y ago
That's not yet clear not true. Its speculatoon based on other articles that got viral

88 points by stoev 9y ago

blusterXY 9y ago

"China is considering losing all control over domestic cryptocurrency activity"

yorwba 9y ago
How does allowing exchanges to operate give them control over domestic cryptocurrency activity? Chinese capital controls are focused on people trying to move their money overseas. If they can't control a certain pathway, they'll rather shut it down completely.
- xnbv 9y ago
  I have always wondered why they have tolerated it for so long. My theory was that high ranking party members use bitcoin to move their bribes out of the country. On the other hand, high ranking officials might have alternative routes.
- lostmsu 9y ago
  They can physically seize company's assets, and block bank accounts.
  - tryingagainbro 9y ago
    ...and jail the execs for 20 years in 15 minute trials--including appeals. It's China.
    - jcmoscon 9y ago
      It's communism
      - polotics 9y ago
        The powerful corporation that calls itself the "Chinese Communist Party" for old times' sake.
- blusterXY 9y ago
  Three examples among many: 1. exchanges provide visibility into who is buying and selling crypto along with the ability to integrate crypto activities within real-name systems (i.e. whitelist wallets, etc.). This is the most efficient approach to market regulation as governments simply require exchanges to comply with policies and do not need to code the monitoring infrastructure themselves. 2. exchanges provide an infrastructure for supporting government initiatives -- the Chinese government is developing its own POW-based cryptocoin and has shown an interest in licensing ICOs and taxing transactions. And if China closes down all of the exchanges in the country it is a rather good question how it plans to accomplish either. 3. In the absence of a viable way to operate domestically, Chinese exchanges will simply move overseas (i.e. incorporate in HK), at which point they can continue to serve Chinese customers throughout the world without the need to bother with ANY Chinese policies (such as the elimination of zero-fee trades, KYC policies and data-sharing etc.). What will happen in crypto is exactly the same thing that happened with video-sharing and group-sales: the government crackdown will be used to push uncooperative companies out of the market, and then licensing requirements will be used to tax those companies that remain while ensuring their compliance with the government fintech agenda. The current back-and-forth is part of an intra-government struggle for political primacy over cryptocurrency activities: the reason the big exchanges are silent is because they have their backers and are working to blunt the impact of these policies on their own businesses and the interests of those with whom they are affiliated. Smaller exchanges without this support are screwed and will close, but that is how China works -- it is not a market economy.

madamelic 9y ago

Yeah, because this totally doesn't go against everything cryptocurrencies are (supposed to be) for. If anything, this is a long-term positive sign, I think. I predict this won't work.

deleted 9y ago
[deleted]
tryingagainbro 9y ago
Depends how badly China wants this stopped. I have a feeling that China is quite a few times worse than IRS--when they want to. Never underestimate what they can do, when they want to.
deleted 9y ago
[deleted]
StavrosK 9y ago
If there's no way to buy cryptocurrencies, what are you going to do? Unless cryptocurrency starts being widely accepted, it'll be easy for governments to ban it and hard for people to acquire it.
bsder 9y ago
It would only fail if there was some inherent flaw in the local currency. And, if that were the case, you would likely have a robust alternative economy denominated in dollars. The Yuan has none of the problems that would allow an alternative currency to really get going. I suspect Chinese bitcoin usage is mostly a bunch mid-level party bureaucrats attempting to transfer wealth outside China so that they can buy tangible assets that can't be seized.

brndnmtthws 9y ago

This seems like fake news. Maybe created in an attempt to manipulate markets? There's a lot at stake. More details can be found here: https://twitter.com/YourBTCC/status/906181802548539393 https://twitter.com/YourBTCC/status/906181802548539393 http://www.allcryptocurrencies.news/bitcoin/bitcoin-crash-of-8-september-due-to-fake-chinese-news/ http://www.allcryptocurrencies.news/bitcoin/bitcoin-crash-of... https://www.reddit.com/r/Bitcoin/comments/6yurbk/what_is_up_mister_btc/ https://www.reddit.com/r/Bitcoin/comments/6yurbk/what_is_up_... https://www.reddit.com/r/CryptoCurrency/comments/6yutr2/am_i_missing_something_markets_tanked_1015_in_a/ https://www.reddit.com/r/CryptoCurrency/comments/6yutr2/am_i... EDIT: Thanks for the downvotes! :)

danmaz74 9y ago
It could be fake news, or it could be well founded rumors - with China, it's very difficult to know. EDIT - FWIW: https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bitcoin-exchanges/ https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bi...
fspeech 9y ago
This is based on a Caixin report, which is a reputable source. Do you have any reputable source to refute it?
- fspeech 9y ago
  Caixin report in Chinese: http://m.finance.caixin.com/m/2017-09-08/101142797.html http://m.finance.caixin.com/m/2017-09-08/101142797.html Gist: exchanges are banned, off-exchange one-to-one trades okay.
vit05 9y ago
The fact that 4 hrs have passed and still didn't have any official statement is the worst part.
- fspeech 9y ago
  Caixin reported that this is based on clause 3 of the regulation issued on 9/4.

ploxiln 9y ago

Relevant meme from over three years ago: https://www.reddit.com/r/Bitcoin/comments/23yy37/how_china_sinks_bitcoin_south_park_style_inspired/ https://www.reddit.com/r/Bitcoin/comments/23yy37/how_china_s... (This is not the first time, nor the second time, nor the third time, that we've seen the news "china bans bitcoin" or "china cracks down on bitcoin".)

ajross 9y ago
Could be the nineteenth time. This is the logic that BASE jumpers use: I haven't died yet, ergo it's safe. It only needs to crash once. And as basically everyone knows but refuses to acknowledge, the liquidity limitations of all this speculation (i.e. there's nowhere near enough demand to buy up a dropping currency) mean that it'll crash all the way to zero when it does.
- mark024 9y ago
  great, then I'll buy the whole 16 millions of it, I could not care less about China, I think their presence in bitcoin is bad, as in everything they do, they are not consumers, they are locusts, they are in it only to profit, to make money, I dealt a bit with chinese, eg. wow gold and is a simmilar story, they did more harm to wow with they gold selling than good.
  - ajross 9y ago
    If you aren't exposed to bitcoin currently and view this instability as an opportunity to jump in at the floor of another boom/bust cycle, then that's a good plan (or at least not an insane one). But that logic only works if you aren't exposed to bitcoin. I expect given your tone and defensiveness that this isn't true and that you're holding a ton of coins right now that you'd be pretty upset to find were worth nothing.
    - mark024 9y ago
      I wish I would be holding a lot of coins... even if bitcoins drops 50% is still worth a lot, I know the privileged elitist HN guys hate it for some reason, while probably is saving lives as we speak in Venezuela, but my tone is probably due experience dealing with Chinese, and their efficiency in farming every bit of value form everything they touch, for example their recently started to farm pubg.

bhaak 9y ago

This is really odd. Remember that Chinese exchange are regulated now, after the Chinese government crushed down on them not so long ago. FWIW, BTCChina "has not received any new directives from Chinese regulators" https://twitter.com/YourBTCC/status/906181802548539393 https://twitter.com/YourBTCC/status/906181802548539393 OKCoin and Huobi also haven't got anything https://twitter.com/cnLedger/status/906195967908601856 https://twitter.com/cnLedger/status/906195967908601856

AndrewKemendo 9y ago

Maybe the Chinese government wants even more control and is going to create a centralized exchange and regulate those markets as much as possible. As I stated in a thread last week[1], this seems to be the most plausible move for them. [1] https://news.ycombinator.com/item?id=15176446 https://news.ycombinator.com/item?id=15176446 Don't think for a minute this is China trying to keep investors away from frauds/scams, it's about them making sure they can control capital flows.

rkagerer 9y ago

My gut feeling is there's some truth to the rumour. Related resources: • Original Caixin Report that sparked all this: http://finance.caixin.com/2017-09-08/101142797.html http://finance.caixin.com/2017-09-08/101142797.html • RECOMMENDED - Good English translation / interpretation of above article: https://docs.google.com/document/d/1sNYGpwj3EKkRhlejoycytZLq1OpFpl0bqOtCev0HexY/edit https://docs.google.com/document/d/1sNYGpwj3EKkRhlejoycytZLq... • Shorter English announcement from Caixin: http://www.caixinglobal.com/2017-09-09/101142821.html http://www.caixinglobal.com/2017-09-09/101142821.html • Coindesk article pointing out Caixin has been spot-on in the past (re their Sep 2 leak regarding ICO fundraising): https://www.coindesk.com/report-casts-doubt-future-chinas-bitcoin-exchanges/ https://www.coindesk.com/report-casts-doubt-future-chinas-bi... • Related official news out of China regarding ICO ban: https://www.reddit.com/r/ethtrader/comments/6ywtkt/the_actual_pboc_news_released_today_pertains_to/ https://www.reddit.com/r/ethtrader/comments/6ywtkt/the_actua... • Tweet from CEO of ViaBTC saying "China will shut down all exchanges": https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bitcoin-exchanges/ https://www.cryptocoinsnews.com/viabtc-ceo-china-will-ban-bi... I agree it's not the first time China's cracked down on virtual currency <--> fiat trading, but if true this could be more intense than their prior efforts.

arisAlexis 9y ago

That's not yet clear not true. Its speculatoon based on other articles that got viral