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Bitcoin Price Recovers From Major Drop, Chinese Exchanges Not Being Banned

Last Updated March 4, 2021 4:59 PM
Joseph Young
Last Updated March 4, 2021 4:59 PM

After all, according to the three largest Chinese bitcoin exchanges OKCoin, Huobi and OKCoin themselves, China-based cryptocurrency trading platforms are not being banned by local financial regulators.

Earlier today, on September 9, state-owned financial news publication Caixin reported that the  Chinese government is planning on shutting down bitcoin exchanges within its local market. Bitcoin expert and Blockstream Chief Strategy Officer Samson Mow clarified that Caixin failed to provide any relevant sources in regard to its report and that it is likely not true. However, many analysts suggested the possibility of Caixin obtaining insider knowledge from Chinese financial regulators, considering its connections to the government.

Whether the report originated from an insider source or was simply not a factual report, OKCoin, Huobi and BTCC denied receiving directives or requests of any sort from PBoC and local financial regulators. More to that, in an announcement published in online bitcoin communities and Chinese social media platforms, OKCoin, Huobi and BTCC reassured their users that they have always successfully complied with the government’s requests and policies regarding bitcoin and cryptocurrencies.

A statement from OKCoin translated by CnLedger read: 

“We (OKCoin) have not received any notice from regulators, and therefore cannot confirm the validity of the report. OKCoin will always comply with local regulations. If the report turns out to be true, we’ll accept it, while keeping users’ funds secure. In the [Caixin] report, BTC & P2P trades were not described as an illegal currency and an illicit method of facilitating transactions. If the report is true, we’ll stop BTC/CNY trades & become a P2P platform for digital assets.”

In essence, the three largest bitcoin exchanges stated that the government has clarified on the legality  of bitcoin in the beginning of 2017 and as a result, bitcoin exchanges should and will not be shut down by local regulators. Furthermore, OKCoin emphasized that the company along with other trading platforms have strictly complied with the requests from the government.

Initially, upon the release of Caixin’s report, bitcoin price plunged to $4,075 within hours. Almost immediately after the statements of the three bitcoin exchanges were published, bitcoin price recovered swiftly to $4,310 in a single day.

Over the past few days, bitcoin has demonstrated strong resilience towards the Chinese market and the government’s ban on initial coin offerings (ICOs). Even after the Chinese government’s declaration of ICOs as an illegal fundraising method and bitcoin price dropped by $500, it recovered to $4,550 within a 24-hour period.

But, as Mow explained, ban on bitcoin and other cryptocurrencies by the Chinese government is having less impact on the global ecosystem than it did a few years ago. Mow went as far to explain that if China does ban bitcoin and its local exchanges, it will not work on bitcoin and it will continue to sustain its upward trend.

“Real or not, I doubt anyone wants to go down in history as the person who tried to ban Bitcoin. Honey badger doesn’t care either way. When has any ban on anything ever worked by the way? There are really only two choices here: embrace cryptocurrencies or get decentralized exchanges faster,” said  Mow.