Chinese Bitcoin Exchange FXBTC Is Closing 5/10 Because Of Unprecedented Pressure From People’s Bank Of China

Journalist:
May 2, 2014

FXBTC posted an announcement to their website earlier today, 5/2/14.  The announcement let FXBTC customers know that FXBTC would be shutting down its site on 5/10/14.  Users have until 5/10/14 to withdraw their funds from FXBTC.  Unfortunately, withdrawals in Fiat at Chinese banks has been closed, at least to FXBTC customers, for over a month now.  Furthermore, FXBTC’s volume has been down for weeks now, and I highly doubt that there are many more customers with funds stuck there.  FXBTC’s announcement comes on the heels of Chinese news claiming that the People’s Bank of China (PBOC) is renewing their efforts to end the flow of Chinese RMB into Chinese Bitcoin exchanges, after the previous 4/15/14 “soft” deadline.  FXBTC used to be a destination for Chinese Digital Currency enthusiasts because it offered both Bitcoin and Litecoin trading for Chinese RMB.

[divider]CCN[/divider]

[dropcap size=small]T[/dropcap]he Chinese announcement:

由于近期央行的政策,我们受到前所未有的压力,包括无法充值提现,导致无法正常运营,决策困难等方面的问题。本网站上线一年多以来,一直深得广大用户支持,虽然经历很多问题,但我们都努力坚持了下来,但这次面临央行的长期封锁,目前来看我们无能为力,历经长期亏损,我们最终决定停止运营FXBTC,为了方便用户提现,我们将开放网站至2014年5月10日,请广大用户在5月10日前尽快提现,之后我们将关闭网站,FXBTC团队再次感谢广大用户长期以来的支持!

Human English translation:

Due to recent changes in PBOC policy, we have faced unprecedented pressure head-on, including the inability to deposit or withdraw which has prevented normal operation and caused issues and caused difficult decisions to be made.  The website has been online for over a year, and has continually earned customer support despite running into problems; however, no matter how hard we work, when faced with the PBOC’s blockade, we are essentially powerless.  After long-term losses, we have finally decided to stop operating FXBTC.  In order to convenience customer withdrawals, the site will remain open until May 10th.  To the majority of FXBTC users, please withdraw before 5/10 because afterwards the site will be closed.  FXBTC’s team would like to take this opportunity to thank all of our users’s long term support, once again!

FXBTC first received notice on 4/2/14 that their commercial bank would no longer be serving them.  That day, multiple other Chinese Bitcoin exchanges had similar announcements; all of the Chinese Bitcoin exchanges cited phone conversations with the local branch of their Chinese bank.  FXBTC took the opportunity to tell the public that the Notice on Further Strengthening Bitcoin Risk Prevention was very real.  However, once 4/15/14 passed, some Chinese Bitcoin exchanges were still operating with a combination of vouchers and codes for withdrawals and deposits on the fiat side, as opposed to bank transactions.  The PBOC was not happy with this, and starting 4/22/14 was having interviews/inquiries with Chinese banks, 3rd party payment processors, and Bitcoin exchanges in a bid to clarify their position: To completely cut off funding to Chinese Bitcoin Exchanges.  Since last week’s most recent “Chinese Bitcoin ban” (There is still no Chinese Bitcoin ban), FXBTC is the first official casualty.  However, CryptoCoinCharts shows that FXBTC’s volume has been stagnant since their 4/2/14 announcement.  Some Chinese Bitcoin exchanges are adapting; others are not.  However, all across the board, BTC/CNY trades’ volumes are stagnating.  CNY to BTC trades used to account for double digit percentages of total Bitcoin exchange volume; presently, it is sitting at 7% and shrinking.

Other Chinese Bitcoin exchanges are also facing identical pressure from the PBOC.  Generally, different banks and 3rd party payment processors in China have interpreted the PBOC’s statements in their own way.  This is the reason why some, larger, Chinese Bitcoin exchanges were able to maintain quasi-normal operations despite continued PBOC pressure.  The newest, more personal pressure, in the form of interviews and a stated mission statement is forcing Chinese Bitcoin exchanges to adapt, or die out.  Chinese Bitcoin exchanges have to rely on new, often buggy, methods to accept Chinese RMB deposits.  Some Chinese exchanges are moving their sites, and presumably their banking, offshore.  Others are planning to set up physical ATMs or to release software that Chinese Bitcoiners can use to trade on the ground in China without any bank interactions.  Understandably, the PBOC is only able to pressure parts of the financial sector into severing their connections with Chinese Bitcoin exchanges.  Bitcoin transactions, and even Bitcoin trading, is not banned in China; the thing that is banned in China is capital flight.

Last modified (UTC): January 30, 2017 15:34

Caleb Chen @bitxbitxbitcoin

Caleb is a graduate of the University of Virginia where he studied Economics, East Asian Studies, and Mathematics. He is currently pursuing his MSc in Digital Currency at the University of Nicosia.