China’s Banks Close More Bitcoin Accounts Following PBOC Deadline

Jon Southurst
Apr 17, 2014 at 17:35 UTC
Updated Apr 18, 2014 at 16:25 UTC

There is continued uncertainty for bitcoin exchanges in China tonight as some large-volume exchanges reported verbal closure notices from banking partners today.

Exchanges OKCoin and Huobi said they had bank accounts closed as of Friday afternoon China time, posting the news on their respective sites.

China has still not ‘banned bitcoin’, despite certain rumors. The implied restrictions refer only to the way bitcoin exchange accounts are funded by their users, and there is no word that withdrawals from exchanges or any other bitcoin transactions are affected.

That said, what follows is a public announcement from Chinese exchange CHBTC and a translation of its subsequent conversation about the issue with one of its banking partners.

The initial announcement read:

“With a heavy heart we are announcing this news, as of 4:15 fourteen exchanges have received communications to have part or all of their bank accounts closed, and the community including us were ecstatic that everything had passed, but as of 10am on 4/17 we officially received notification from the Bank of China Beijing Baijiazhuang branch to close our account, and after verification by our senior management in Beijing, we are carefully making this public statement.”

Phone call

The telephone conversation between CHBTC and its banking associate went as such:

CHBTC: Has the bank received specific directives in the form of documentation?

Bank: It is not convenient for us to answer that, but prior to this we did not know your company was engaged in the bitcoin business, and so since we can find and call you, you can understand that someone has been eyeing all the company accounts used to do bitcoin business, and proactively told us.

C: Must we close our account; can we just zero out our balance?

B: Well it is up to you, however you know that someone is eyeing your account, do you think that it would be appropriate [to keep it open]? since I am making this call to you today, the meaning should be very clear, and I hope that you guys won’t make it difficult for me, and I can’t be more explicit than this.

C: what happens if we do not want to close our account, and insist on waiting for a document/notice?

B: Then it is up to you. We are calling because we would like you guys to close your account. If there are new notices, we might just directly execute; in any case you guys should transfer the account’s balance to another bank card, and then engage in the process of closing down your account.

C: OK then, we will cooperate! prepare to close the account.

B: Your cooperation is much appreciated.

C: Can we know when you received the notice, was it before 4/15, or is it in the past two days?

B: It is not convenient for me to disclose the specific time, but for us we wouldn’t dawdle over such matters, so you can figure it out yourself.

C: Do we have to close down both business and personal accounts?

B: I am only in charge of personal accounts, but my colleague for the business account will also contact you immediately.

C: do we have specific account closing time?

B: As fast as possible!

One of many

CHBTC added that these messages came from just one of its banking partners, and it had not received any similar notices from other business associates. It was, however, preparing for that eventuality and would not be using personal bank accounts to fund exchange accounts in future.

Chinese exchanges will no doubt find other ways to serve their customers, the most likely option being the voucher system pioneered by BTC China in which third-party code numbers are used to deposit and withdraw funds.

BTC China’s CEO Bobby Lee told CoinDesk all of its bank accounts are still open.

“Contrary to some rumors, we still have not received any notices from any of our banks or the PBOC, requesting to close accounts. All of our customers can continue to use our banking deposit channels to fund their exchange accounts on BTC China,” he added.

This article was co-authored by Jon Southurst and Rui Ma.

Shanghai image via Shutterstock