Top China Bitcoin exchange to stop trading

One of China’s biggest Bitcoin exchanges will stop trading as the government clamps down on the virtual currency market.

BTCC said it will stop all trading on 30 September in response to tightening regulation in the sector.

It comes after authorities banned initial coin offerings.

The country has seen an explosion of digital currency trading, sparking fears about the financial risks and speculative investing.

The price of Bitcoin tumbled sharply following the BTCC announcement late on Thursday but has since regained some ground.

Cracking down

Chinese authorities expressed concern over the investment risks involved in crypto-currencies and ordered a ban on initial coin offerings earlier this month.

A growing number of tech companies are opting to sell digital “tokens” to raise funds because they are quick, easy and unregulated.

• Initial coin offerings: Is this the next financial scandal waiting to happen?
• Tech Tent: The crypto-currency craze

Then on Wednesday this week, the state-backed National Internet Finance Association issued a warning that virtual currencies are increasingly being used as a tool for illegal fundraising and money laundering.

BTCC, one of the world’s biggest Bitcoin platforms, said in a tweet Thursday after “carefully considering” the directive from regulators, trading on its platform would cease later this month.

More intervention is expected. The BTCC shutdown comes ahead of speculation that the Chinese government plans to completely ban exchanges that allow virtual currency trading.

Reuters and other media have reported this week, citing sources, that China is planning the suspension, but the regulator has not yet made any such announcement.

China’s ICO ban, as well as warnings by regulators in other countries, have driven fears of a wider crackdown and prompted a sell-off that has wiped billions of the value of crypto-currencies since they hit record highs at the start of the month.