One of China’s “Big 3” exchanges is demanding its bitcoin users to specify the origins of their funds, Chinese media outlets reported.
According to CNLedger.com, users of Huobi were recently asked to identify where they got their funds, provide bank transfer records of moving funds from a legitimate bank to Huobi and also provide an extensive explanation not only on the transfer, but also where the money is transferred to and how the customer intends to use the digital currency.
“With this step, we expect #bitcoin withdraws from major exchanges become available soon,” the Chinese news outlet tweeted.
Under the new guidelines, bitcoin users need to submit four documents before they can trade with any digital currency exchanges in the Chinese market. The requirements, according to the report, are part of the People’s Bank of China’s (PBoC) new know-your-customer and anti-money laundering systems for cryptocurrency exchanges.
News of Huobi’s new guidelines comes after PBoC announced it will subject domestic bitcoin exchanges to current banking and anti-money laundering laws. In addition, the exchanges would also be required to collect information to identify their clients.
If enacted, the rules would require exchanges to install systems that will collect customer information and report suspicious trading activities to authorities. PBoC will be in charge of handling any violation.
The new guidelines is the latest action taken by the Chinese central bank as it cracks down on the country’s digital currency sector.
The central bank’s close scrutiny on cryptocurrency operations has already claimed many casualties, including the so-called “Big 3” exchanges—Huobi, OKCoin and BTCC—which halted bitcoin and litecoin withdrawals while they undergo an upgrade to fight “money laundering, exchange, pyramid schemes and other illegal activities.”
Smaller digital currency operators were also forced to make several changes in their operations. Shenzhen-based bitcoin marketplace BitKan stopped new registrations and suspended over-the-counter trades while the company upgraded its anti-money laundering checks. Bitcoin mining company HaoBTC also announced that it is closing its exchange operation “given the fact that the prospect of a regulatory policy for a bitcoin exchange isn’t clear yet.”
The PBoC had already warned Chinese digital currency exchanges to enforce anti-money laundering and foreign exchange regulations.
Current bitcoin price
Bitcoin traded at $1,099 early Wednesday morning.