China’s Bitcoin Exchange Fiasco

Ah yes, another ‘believer’ that totally agrees that China is kind of sealing it’s demise as the hub for bitcoin exchanges. We noted last week that the PBoC (Peoples Bank of China) in its crackdown of domestic bitcoin exchanges for “nebulous” reasons would certainly move ‘hubs’ to…………well, London, NY, Singapore (pick anywhere of your choice—just not Fargo). Here is a great read by someone smarter than us, but we like him anyway.

OKcoin and Huobi, China’s two largest domestic bitcoin exchanges, have been recently ‘disabled’ by Chinese regulators as they probe money laundering and fraud. The real reason may have more to do with capital controls, but no matter what, this type of disruption will only drive the centers for digital currencies to Western Nations. It is way too easy to just change wallets and, if you haven’t noticed, there are a whole lot of new exchanges in Western nations to hold those wallets. More credibility too (think CME). Great read.
(Bill Taylor/CEO)

“Akin Fernandez, a software engineer and owner of the Bitcoin startup Azteco, predicts that China will not enjoy the benefits of Bitcoin.

He says:“Beijing enforcing a thirty-day lock-down is suicidal and at the end of this period expect a shock exodus from Chinese exchanges as users move to businesses in better jurisdictions.”

His comments come in the wake of the People’s Bank of China’s Directive to Exchanges in China to close the two main exchanges for 30 days until they implement Anti-Money Laundering system to ensure they are in compliance with local financial and money transmission regulations.

China’s two biggest Exchanges OKcoin and Huobi, therefore, disabled withdrawals for Bitcoin and Litecoin funds. The subsequent results have been the free fall of Bitcoin price and other cryptocurrencies’ prices.”

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