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China’s Cryptocurrency Exchanges Close Tomorrow, What Does This Mean?

By

Matthew

De Silva

WriterETHNews.com

In less than 24 hours, China’s cryptocurrency exchanges will officially cease trading. Amid rumors that the ban will be cancelled, several exchanges are reportedly launching P2P OTC cryptocurrency trading services. With bitcoin touching $6,000, tomorrow’s events could have a significant impact on all markets.

This Halloween, cryptocurrency traders have more to fear than ghosts and goblins. Even as bitcoin reaches yet another all-time high (this time, at over $6,000), there is tremendous uncertainty in the markets. Why? Because on October 31, 2017, China’s cryptocurrency exchanges will stop trading, as required by Chinese regulatory authorities. Here, ETHNews provides a rundown on the developments at some of the major exchanges: Huobi, BTCChina, and OKCoin.

Huobi

Today, in an announcement, Huobi explained that it will “terminate CNY trading at 24:00, October 31st, 2017 (GMT +8).” CNY is the abbreviation for the Chinese yuan, the unit of account for the renminbi (RMB). On September 15, 2017, Huobi stopped new user “registration and RMB deposit service” when it received guidance from “the regulator.”

Per today’s release, Huobi users will still be able to withdraw their CNY “at any time after the shutdown.” Even though trading is coming to an end, Huobi is offering “free digital assets storage service for all users.”

Coinciding with Huobi’s closure, Huobi Pro (a “global professional trading platform” affiliate) is beginning BCC/USDT and ETC/USDT trading. Launched in July 2017, Huobi Pro is dedicated to blockchain asset-only trading, whereas Huobi is/was dedicated to fiat-blockchain assets trade.

Earlier today, Yicai Global reported that “Huobi will launch an over-the-counter peer-to-peer trading service in a bid to continue its support of the global exchange of currency and digital assets.” It’s unclear whether this is the same service described above, but over-the-counter (OTC) cryptocurrency trade has become increasingly popular in China. According to coin.dance, the weekly volume of bitcoin exchange in China remains extremely high. Last week’s LocalBitcoins volume was approximately 80 million CNY ($12 million USD) and this week’s LocalBitcoins volume is approximately 65 million CNY ($9.7 million USD) thus far.

BTCChina

On BTCChina, another of China’s major bitcoin exchanges, users have been unable to withdraw funds from their accounts as of October 30, 2017 at 12:00pm Beijing time. About two weeks ago, the exchange announced that it would increase its handling fees on October 25, 2017 to encourage users to make withdrawals ahead of the deadline. As ETHNews previously reported, BTCChina elected to end trading on September 30, 2017.

OKCoin

Like Huobi, OKCoin is slated to cease trading tomorrow, but that’s not where the story ends. Late last night, CnLedger, a popular outlet that covers cryptocurrency and blockchain developments in China, tweeted about a new P2P bitcoin platform called OKEx.

Following the trail of breadcrumbs, it’s clear that OKEx is a Hong Kong affiliate of OKCoin. Indeed, OKCoin’s director of financial markets, Lennix Lai identifies himself as an employee of both companies.

In replies, cnLedger noted that OKEx is registered outside of China and claims to be operating independently of OKCoin. CnLedger also tweeted its belief that OKEx will support CNY as well as USD and JPY (Japanese Yen). Several Twitter users inquired about the differences between P2P OTC and exchange-based trade. CnLedger explained, peer-to-peer over-the-counter platforms are “not as convenient as exchanges, and are less safe (many scammers). But it's still much better than nothing.”

Overall

At publication, according to CoinMarketCap, bitcoin is trading for $5,657 on OKCoin and $5482 on Huobi, with a cumulative 24 hour volume of approximately $24.5 million. Meanwhile, Ether is trading for $284 on OKCoin and $273 on Huobi, with a cumulative 24 hour volume of approximately $7.7 million. None of the price data on the Chinese exchanges is being used to calculate the global prices of bitcoin and Ether, which now sit at $6088 and $306 respectively.

Chinese regulators have arguably been the most heavy-handed in the entire world. The People’s Bank of China announced a ban on token offerings (ICOs) in September 2017 and shortly thereafter its broad cryptocurrency crackdown effectively prevented travel by exchange executives. While these actions did little to quell the ascent of bitcoin, there’s no telling how tomorrow’s closures will impact the cryptocurrency markets.

Matthew De Silva

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles. Matthew is a full-time staff writer for ETHNews.

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