Chinese Bitcoin Exchanges OKCoin, FXBTC Report New Deposit Freezes

The Chinese exchanges say they have halted some deposit services following talks with financial partners.

AccessTimeIconApr 2, 2014 at 7:27 p.m. UTC
Updated Sep 14, 2021 at 2:08 p.m. UTC
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Following on the heels of the news that China-based bitcoin exchange BTC38 would suspend fiat-to-digital currency trading, rival Chinese exchanges OKCoin and FXBTC have received official notices from financial partners notifying them that certain accounts will be terminated.

The new announcements are the latest indication that China's central bank, the People's Bank of China (PBOC), may be following through on its decision to more actively enforce prior rulings related to how domestic financial service providers can interact with the bitcoin exchanges.

For example, while OKCoin was contacted by its third-party processor, FXBTC has been contacted by commercial banking providers.

China previously banned third-party payment services from dealing with bitcoin exchanges this past December. However, its domestic bitcoin exchanges had found a workaround for this issue by accepting payment into corporate accounts.

A new report from The Financial Times has suggested that the PBOC is now looking to close this loophole.

Notifications received

OKCoin revealed via its website that it had been contacted by one of its third-party payment processors, and that as a result, it will stop servicing deposits via prepaid card. Debit cards and yuan withdrawals, however, are not affected.

FXBTC's situation at press time was perhaps more dire. It posted an emergency notification on its website noting that it has received word from commercial banking partners who are looking to terminate certain accounts.

The exchange indicated that it would stop debit-card deposits as of 3rd April, and temporarily halt withdrawals after Sunday, 6th April. As of press time, however, it said its third-party processing channel – operated by Tencent's TenPay – was still active.

However, another Chinese exchange, Huobi, reported that it has not received official notification that any of its accounts were affected.

Still no official notice

Together with the day's earlier announcement from BTC38, the reports suggest that the PBOC may be pressuring the country's commercial banks and payment companies to close bitcoin trading accounts.

Earlier reports had suggested that all accounts would need to be shut down by 15th April. However, the PBOC has yet to make an official announcement regarding any changes in policy.

This official notice may be unlikely, however, as BTC China CEO Bobby Lee has indicated that the PBOC is simply following a "stricter interpretation of the written rules" regarding bitcoin and digital currencies.

Reactions and price implications

Reaction to the news on reddit was still sceptical, with many indicating that the announcements don't actually confirm that the PBOC will be looking to enforce the broad crackdown that has been suggested.

As of press time, the price of bitcoin on the CoinDesk USD Bitcoin Price Index (BPI) was down 8.41% on the news, having fallen $40 from the day's opening total of $478.

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Prices in China were affected similarly, according to the CoinDesk CNY BPI, which at press time was down 7.25% from the day's open of ¥2,861 at ¥2,653.74.

Additional reporting provided by Rui Ma.

Great Wall of China image via Shutterstock


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