Gox BTC, a bitcoin exchange based in Mainland China, announced over the weekend that it will cease its operations on 18th January.

The company cited “increasing operational costs and legal uncertainty” as key catalysts for its closure.

In a statement published on its website, the exchange said:

“Due to reasons well-known, the operating costs and legal uncertainty for running bitcoin [businesses] have increased in China. As such, we decided, albeit unwillingly, to close the platform that we built from scratch. No words can describe our sadness at the moment. We firmly believe that bitcoin is a revolution and have been dedicated to contribute to the cause, but the risks and difficulty have increased so much that the future is far from certain …”

The statement also instructed users to withdraw their deposits as soon as possible, as no withdrawals will be allowed after the website’s scheduled closure date on 18th January.

The company concluded by stating that the website may open again if “opportunity is ripe”, though it refrained from making a commitment as to when this will happen, if at all.

User Reaction

Gox BTC, launched in May this year, is one of the lesser-known cryptocurrency exchanges based in Mainland China. On 4th January, the exchange’s website indicated a 24-hour trading volume of just 2.87 BTC, which has dropped sharply from its usual level of around 100 BTC per day.

In comparison, China’s leading exchange Huobi.com, saw a trading volume of 100,737 BTC during the same period.

The news of Gox BTC’s closure has created unease among Chinese Bitcoiners, who have grown wary of government interference, after the nation’s central bank barred banks from working with exchanges last month.

On Sina Weibo, China’s leading microblog service, some users posted “condolences”, while others praised the website’s timely update as act of responsibility.

Most people attribute the exchange’s closure to increasing competition in the industry. At the moment, all major Chinese Bitcoin exchanges don’t charge trading fees, which makes profitability an unattainable goal for many.

Shanghai Skyline Image via Shutterstock 

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