China has begun rounding up and detaining Bitcoin executives who run exchanges in the country, amid a huge crackdown against cryptocurrencies.
As the war on Bitcoin continues, Chinese media is reporting that executives who operate Bitcoin exchanges are being told they are not allowed to leave Beijing whilst the government conducts an investigation.
“A number of informed sources say the executives of special currency trading platforms are not allowed to leave Beijing to cooperate with the investigation. In accordance with regulatory requirements, trading platform shareholders, the actual controller, executives and financial executives need to fully cooperate with the relevant work in the clean-up period in Beijing.”
Trustnodes.com reports: Australia’s Financial Review (AFR) says the above has been confirmed with them by “a source close to one of the biggest exchanges, Huobi,” which told them its founder, Li Lin, was required to “report to the authorities and cooperate with their work at any time.”
The draconian measure is undertaken following a decision by China’s Communist Party to close down all crypto exchanges, with trading volumes in the country dropping considerably.
Chinese trading volumes now account for only around 5% – 10% of bitcoin’s or ethereum’s global trading volumes. With price there significantly lower. Leading CoinMarketCap to exclude them from calculations of average prices.
China, therefore, appears to have isolated themselves, while the rest of the world seemingly moves on, but questions are being raised regarding miners, with some 80% of their operations centralized in the country.
An investor in Chinese bitcoin mines told AFP: “All of us didn’t believe they would shut down the exchanges so we are preparing for the worst.”
China’s decision to shut down exchanges took many by surprise and was very unexpected with the authoritarian government giving no hint they plan to take such draconian measures.
Questions therefore are being raised on whether they might do so for miners, a $2 billion importing industry which may find it difficult to operate without the ability to sell their bitcoins on the market.
That is especially so because WSJ is suggesting the ban is a total ban, with apparent plans to declare even Off the Counter (OTC) trading as illegal.
In which case, it would be as good as impossible for Chinese miners to operate as they would be unable to cover their considerable expenses without the ability to exchange their coins for fiat currencies.
Which is why many expected OTC trading to be allowed, with Chinese media so reporting initially, but it’s not clear whether they have changed their mind.
As such, miners are seemingly preparing for the worst, with some thinking of relocating to neighboring countries or to very cold areas, such as Iceland.