False Alarm Reports Claim That China Orders Shutdown Of Cryptocurrency Exchanges

On September 8, 2017, Caixin reported that Chinese regulatory authorities have decided to limit the nation’s virtual currency exchanges. Based on rough English translations and a hyperbolic headline (“The end of the virtual currency exchange era”), many outlets quickly jumped to the conclusion that this amounted to a complete shutdown of Chinese cryptocurrency exchanges.

However, it is unclear whether Caixin reported a temporary trading suspension (related to China’s ICO ban) or a more permanent ban on all cryptocurrency exchanges. Journalists later backpedaled from the sensationalist storyline, realizing that large Chinese exchanges remain in operation, including OKCoin and Huobi.

Regardless, as fear, uncertainty, and doubt spread, virtual currency prices fell across the board. At the time of publication, bitcoin’s 24-hour price is down by 6.4 percent and Ether’s 24-hour price is down by 8.1 percent. Even if trading is paused for Chinese cryptocurrency exchanges, over-the-counter (OTC) trading remains unimpeded, according to Chinese media.

On Monday, the People’s Bank of China (PBoC), along with other Chinese financial authorities, announced a ban on token offerings (ICOs). While those statements explicitly prohibited ICO entities from swapping “legal currency” and “tokens,” they did not allude to the legality of trading platforms. Today, the PBoC released an English translation of its token offering guidance, so it’s possible that the old announcement was misinterpreted and recycled by media sources.

ETHNews will follow this story as it develops.

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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