The world’s leading cryptocurrency, Bitcoin has crashed for the fifth straight day on news that BTC China, one of China’s largest online exchanges will stop handling trades amid a government crackdown on cryptocurrencies.
BTC China will immediately stop accepting new account registrations on its BTCChina Exchange, Chief Executive Bobby Lee said Thursday in a tweet. The decision was made after “carefully considering” the Sept. 4 announcement by Chinese regulators that outlawed initial coin offerings, he said.
Bloomberg reports, the cryptocurrency has slumped as much as 27 percent since Sept. 7. It had risen more than four-fold this year amid greater acceptance of the blockchain technology that underpins the exchange method, global political uncertainty and increased interest in Asia.
China accounts for about 23 percent of bitcoin trades and is also home to many of the world’s biggest bitcoin miners, who use vast amounts of computing power to confirm transactions in the digital currency.
The communist nation plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, Bloomberg News reported Monday. The ban will only apply to trading of cryptocurrencies on exchanges, according to people familiar with the matter, who asked not to be named because the information is private. Authorities don’t have plans to stop over-the-counter transactions, the people said.
Shanghai Financial Service Office has also ordered to close down bitcoin trading platforms in the city, China Business News reported, citing an unidentified person.
While Beijing’s motivation for the exchange ban is unclear, it comes amid a broad clampdown on financial risk in the run-up to a key Communist Party leadership reshuffle next month. Bitcoin’s surge has fueled concerns of a bubble, prompting skeptics from JPMorgan Chase & Co.’s Jamie Dimon to billionaire investor Howard Marks to warn of a looming crash.