China's Bitcoin Exchanges Receive Shutdown Orders and Closure Timeline

Tian Chuan & Rachel-Rose O'Leary
Sep 15, 2017 at 11:28 UTC
NEWS

China's bitcoin and cryptocurrency exchanges have received instruction that they will need to voluntarily shut down by September 15.

According to both leaked documents and statements from local exchange executives, issued on condition of anonymity, China’s regulators have now issued verbal directives indicating how they expect the businesses to wind down operations due to the fact that they are operating domestically without a formal license.

A document leaked on Chinese social media, translated below, lists a series of steps the exchanges must undergo during that closure. While not received directly by exchange executives surveyed, the document is reportedly consistent with verbal guidance.

Issued by the office of the Leading Group of Beijing Internet Financial Risks Remediation, the document outlines how exchanges will need to coordinate with local regulators following their announcements, listing how they should handle customer data and banking relationships.

Already, however, two exchanges – BTCC and ViaBTC – have announced their closure, both citing the regulatory statement issued by authorities on September 5.

BTCC, in the wake of the announcement, posted a series of tweets about user withdrawals, stating that they will be able to get their money out even after the September 30 closure date. In one of those tweets, the exchange suggested that users "withdraw their funds as quickly as possible."

While not all China-based exchanges have formally indicated that they will shut down, one exchange executive indicated that more announcements will be forthcoming in light of the order. Exchanges Huobi and OKCoin are said to have met with regulators today, and are expected to announce plans to shut down within hours.

Representatives from Huobi and OKCoin did not respond to requests for comment at press time.

The full translated document reads:

1. Before 20 September 6pm, exchanges shall come up with a detailed risk-free clearing plan, and send this plan to the office. Exchanges shall deal with their claims and liabilities properly, and insure that investors’ funds and virtual currencies are safe.

2. Before 20 September 6pm, exchanges shall determine a bank account, which will be used for depositing user funds. All other accounts in banks and other non-bank payment service providers shall be canceled and reported to the Business Management Department of People’s Bank of China.

3. Before 15 September midnight, exchanges shall publish closing announcements, and announce a schedule to stop the trading of all virtual currencies. New user registration shall be stopped immediately after the announcement.

4. Shareholders, controllers, executives, and core financial and technical staff of exchanges shall cooperate fully with authorities during the clearing, while staying in Beijing.

5. Exchanges shall report their developments daily to local authorities before the clearing is completed.

6. Exchanges shall save all user trading and holding data, and send it to local authorities immediately in DVDs.

The document is signed: The office of the Leading Group of Beijing Internet Financial Risks Remediation, Sept. 15, 2017

All times listed are Beijing local time.

Flag with storm image via Shutterstock

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

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