CEOs of five major Chinese bitcoin exchanges have withdrawn from this weekend’s Global Bitcoin Summit in Beijing, after banks forced most of them to close accounts related to bitcoin activity.
The five exchanges: OKCoin, Huobi, BTC China, BtcTrade and CHBTC, made a lengthy joint statement on Weibo late Tuesday that they would no longer participate in large bitcoin meetings or gatherings. The statement continued that the companies agreed to: Curb excessive speculation and protect investors, comply with all state policies and regulations, promote transparency in exchange processes, pay a flat fee for high-frequency trades, and report the latest industry developments to authorities.
The speakers’ list would have included OKCoin’s Star Xu, BTC China’s Bobby Lee and Huobi’s Leon Li. Pulling out of the event will lower the exchanges’ profile and avoid provoking unhappy authorities into further action by having management speak in public.
Conference still fine
Despite the People’s Bank of China’s (PBOC) disapproval of bitcoin, ticket sales for the two-day Summit on 10th-11th May are said to be “stellar” and representatives from other bitcoin businesses will still play a part.
There is far more to China’s bitcoin economy than just exchanges, and Summit speakers will discuss new innovations, startup advice, communication with outside markets and future directions for bitcoin in China.
Other Summit speakers
Scheduled international speakers who still plan to attend the Summit are Roger Ver, Ethereum’s Vitalik Buterin and Anthony di Iorio from the Bitcoin Alliance of Canada. The list also includes a number of representatives from Chinese bitcoin startups and organizations including Peat.io, BTC123, BitAngels and Bifubao.
What actually happened in China?
Commenters on bitcoin forums have been bewildered at events in China this year, sometimes mistaking the actions of businesses and central bank for a series of policy backflips and creating the inaccurate ‘China banned bitcoin again‘ meme.
In reality, nothing much changed. The PBOC announced its desire for banks not to engage in business with bitcoin exchanges in December last year, and has not changed its position since then.
Bitcoin entrepreneur Zhang Weiwu put events into perspective with this experienced analysis of Chinese business politics and the orders of magnitude affecting both profit and power.
Bitcoin, he wrote, represents too small a sector for an authority the size of the PBOC to deal with directly on a political level, leaving consumer banks confused as to how to act. This allowed exchanges to sidestep the directives for a time, until the PBOC was forced to reaffirm its opposition to bitcoin in more certain terms.
This may also explain why bitcoin exchanges never received any official notice from the PBOC itself: An authority representing 1.3 billion people does not deal directly with local business, and bitcoin is still relatively obscure.
What’s next for bitcoin?
The way forward for other sectors of China’s bitcoin economy will be interesting. Businesses less reliant than exchanges on fiat-crypto gateways, such as merchant services and secure wallets, and the ASIC hardware manufacturers keeping China’s booming mining operations equipped, are reportedly shrugging at the bank bans and pushing on with their growth plans.
As for exchanges themselves, they will go about their business under the guidelines listed in their joint statement above, guides that appear to keep a tight rein on their activities.
CoinDesk will be attending the Global Bitcoin Summit in Beijing for further reports.
This piece was written with assistance from Eric Gu
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