Two Months And Counting: Exchange Withdrawals Still Blocked in China

Conversations are still ongoing in China, where bitcoin exchanges are in talks with regulators over how to once again open withdrawals.

Apr 11, 2017 at 2:30 p.m. UTC
Updated Sep 11, 2021 at 1:13 p.m. UTC

One month after China's bitcoin exchanges announced they had upgraded their services in response to requests from regulators, digital currency withdrawals remain frozen for users.

According to local exchange representatives, speaking on background, the companies remain in talks with the People's Bank of China (PBOC), the country's central bank and chief financial markets regulator. At issue, exchange officials said, are the know-your-customer rules that would be put in place on reopening.

Talks are said to be ongoing between the two camps, with the PBOC favoring stricter rules for customer onboarding. One source, Roland Sun, a legal lead for blockchain consortium ChinaLedger, said that the KYC proposal was "pending approval" from the PBoC.

The developments are the latest that come amid what has been a period of quiet after a turbulent year for China's bitcoin startups.

At the start of 2017, the PBOC issued a warning to the startups amid a volatile period for the bitcoin price. Still, conversations began shortly thereafter, with local bitcoin exchanges agreeing in February to pause withdrawals for one month while perceived issues were addressed.

PBOC officials have since gone public about their desire for exchanges to have strong KYC and anti-money laundering (AML) restraints, reporting that money laundering and capital flight were top concerns.

Exchange traders, on the other hand, largely migrated to peer-to-peer platforms or relied on in-person deals. In March, the exchanges announced they had completed the upgrades – a move they hoped would spur a decision, prompting optimism a decision would be made after a major regulatory meeting.

Still, despite delays, some local exchange representatives expressed optimism that the process is nearing conclusion, and that withdrawals would soon resume, if later than expected.

"I think there will be a result in the first half of the year," Zhou Shouji, operator of OTC trading firm FinTech Blockchain Group, said in remarks.

Other exchange representatives said the process would reach a conclusion soon, though they did not provide a time estimate.

Elsewhere, other parts of the ecosystem appear to be moving forward, with an event in Chengdu in June set to see participation from BTCC and OKCoin, among other regional blockchain startups.

Locked door image via Shutterstock

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