BITCOIN

PBoC finds ‘irregularities’ in Chinese bitcoin exchanges’ operations

TAGs: Bitcoin, China, PBOC

China’s central bank is putting the spotlight back on bitcoin exchanges in the country.

This time, the People’s Bank of China (PBoC) has reportedly released the results of its inspection of the local bitcoin trading platforms. In it, investigators from the central bank described the “irregularities” they said they discovered in the operations of major bitcoin exchanges—BTC China, Huobi and OKCoin—which led to the recent “abnormal fluctuations” in the price of the popular digital currency.

PBoC finds ‘irregularities’ in Chinese bitcoin exchanges’ operationsAccording to Chinese-language news outlet JF Daily, the preliminary inspection by the PBoC’s Shanghai branch found BTC China offered loans, which is beyond the scope of its business as a bitcoin exchange.

In Beijing, central bank investigators also found alleged anomalies in the operations of OKCoin and Huobi. According to a separate report from Hexun, the three bitcoin exchanges offers a loan feature called margin trade, which the PBoC said not only violates the country’s rules but has also caused bitcoin’s recent volatility.

Additionally, the investigators discovered that the exchanges do not have a third party depository of investors’ funds or have they established sufficient anti-money laundering measures.

All three exchanges have stopped margin trading and futures trading after the central bank inspections, according to reports.

The three bitcoin exchanges have been caught in the middle of the Chinese central bank’s recent crackdown on virtual money. Several weeks ago, PBoC officials conducted on-site visits at BTC China, OKCoin and Huobi to check whether the exchanges’ operations have gone beyond the scope of their market. The inspections had traders worried that Chinese are going to tighten their oversight of the digital currency, which, in turn, sent bitcoin tumbling 16 percent to a low of $761.86—it’s lowest since peaking at $1,140.64 in early January.

Current bitcoin price

The price of bitcoin dropped to $883 during early Thursday morning’s trading.

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