China tightens cryptocurrency ban with new directive

Chinese regulators have decided on a “comprehensive ban” on platforms that allow people to buy or sell virtual currency in China, reports The Wall Street Journal. China is cracking down on Bitcoin trading and also planned to shut down Bitcoin exchanges, according to reports from earlier in September, but this move goes even further, with government officials apparently offering an explicit directive to the nation’s currency exchanges.

WSJ reports that a document was passed around at a private meeting on Friday instructing exchanges based in Beijing to “unwind their operations and provide information on bank accounts used for clients’ deposits by Wednesday.” Officials reportedly told industry executives about a decision on the ban at that meeting in Beijing. Sources told the paper mainland access to foreign bitcoin exchanges online like Coinbase in the US would also be blocked by the country’s Great Firewall.

Until last week, traders believed that China would still permit peer-to-peer or over-the-counter platforms that allow buyers and sellers to connect, even if it did crack down on commercial activity. Bitcoin’s popularity may have also stoked concerns from authorities who worry the cryptocurrency could “weaken official control of the country’s money supply,” given that everyday investors have bought heavily into Bitcoin, even betting against the yuan. China also banned initial coin offerings at the beginning of the month as an illegal form of public financing.