OKCoin and Huobi have frozen bitcoin withdrawals after the People’s Bank of China warned trading platforms that they may be closed unless they comply with regulations.

The official statement was published after a meeting with representatives of Chinese exchanges BTCTrade, Yunbi, HaoBTC, CHBTC, BTC100, BitBays, Yuanbao, Dahonghuo and Jubi. The central bank intends to enforce the anti-money laundering and foreign exchange legislation upon cryptocurrency trade in the country.

“If the exchanges violated the above requirements, and if the circumstances were serious, the inspection team may ask the relevant departments to close down the exchanges according to law.”

In particular, the People’s Bank of China urges the exchanges to limit margin trading and zero-fee trading, CoinDesk reports. All the cryptocurrency traders present at the meeting agreed to these requirements.

Chinese authorities seem to be increasingly uncomfortable about the growing value of bitcoin. In the words of one exchange representative, the regulator “perceives the high price and the rising price as a threat.”

Soon after the announcement, two largest Chinese exchanges OKCoin and Huobi declared they freeze bitcoin and litecoin withdrawals for a month, while the platforms are being upgraded to comply with the law. Yuan withdrawals are not affected.

 

Besides, BTCTrade exchange announced today that it starts charging 0.2% service fee on bitcoin transactions. Prior to the meeting, the same fee had been introduced by the three largest bitcoin exchanges BTCChina, Huobi and OKCoin.

Following the news, bitcoin price dropped sharply below $ 1,000 and hit $958, losing about 7.5% within a few hours. At press time, it is on the upward correction trend hovering around $980.

According to Bitcoinity, over the last 24 hours, the share of Chinese stock exchanges OKCoin and BTCChina in the global bitcoin trading volume reached 21.67% and 14.5% respectively. BitFinex was the third with the share of 13.23%.

Elena Platonova, Svetlana Nosova

Image via Flickr

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