Bitcoin crashes after China rules all crypto-related transactions illegal

Bitcoin crashes after China rules all crypto-related transactions illegal

The People’s Bank of China revived its tough stance on digital currencies on Friday; ruling all crypto-related trading activities illegal and banning overseas crypto exchanges from providing services to mainland investors.

The regulator announced plans to bar financial institutions, payment companies and internet firms from facilitating cryptocurrency trading; as well as to strengthen monitoring of risks from such activities.

 

“Overseas virtual currency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity,” the PBOC said in a Q&A posted to its website.

 

“Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” the central bank said.

 

ALSO READ: Bitcoin drops as much as 10% as risky assets tumble globally

 

 

The move by China sent bitcoin and other virtual currencies plummeting.

 

The world’s number one digital asset by market capitalization dropped over 5% to below $42,000.

 

Other cryptocurrencies followed the declining trend with ether dropping 10% to below $2,800; while dogecoin crashed over 8% to below $0.20, according to the Coinmarketcap website.

 

The latest ruling comes as part of a broader state-run campaign by Chinese regulators against cryptocurrencies.

 

Earlier this year, Beijing banned mining in major bitcoin hubs, such as Sichuan, Xinjiang and Inner Mongolia; which led to a sharp drop in bitcoin’s processing power, as multiple miners took their equipment offline.

About The Author

Osigweh Lilian Oluchi is a graduate of the University of Lagos where she obtained a B.A (Hons) in English, Masters in Public and International affairs (MPIA). Currently works with 1stnews as a Database Manager / Writer. [email protected]

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