As China continues to be hostile towards crypto, over 20 Chinese companies dealing with digital assets have announced that they will cease operations and withdraw from local markets.
The Chinese Crypto Ban: The Impact
Since years, China’s negative attitude towards the cryptocurrency industry is well-known. Local authorities often remind investors of it. The September end document was published by the central bank of China stating that mining and trading of digital assets is prohibited within Chinese borders. The document also banned people from trading on such exchanges.
Many crypto-related businesses shut down within a short time. The China Securities Journal reports that more than 20 of these entities have shut down their businesses as they no longer provide services and are moving abroad.
It is important to note that Huobi, a major trading platform, was forced by the increased ban to stop new registrations from China. A few days later Huobi Poll, one of the biggest Bitcoin pools, moved more than $4 billion in BTC from miners. This was the largest fund inflow since December 18, 2017.
Sparkpool was also affected by the Chinese crackdown. The second-largest ETH mining site announced last week that it had stopped accessing new users from Mainland China and that all its services were suspended as of September 30th.
The Chinese government also seized mining equipment from the northern province Inner Mongolia, marking the 45th such confiscation in this province.
BTC Gains Strength After Chinese Bans
Although the government in the most populous nation has intensified its efforts to stop any cryptocurrency operations within its borders, bitcoin has resisted these attacks. As of this writing, the price of bitcoin is at $54,500. This represents a 25% increase over the People’s Bank of China’s recent ban.
Edward Snowden, a well-known whistleblower, recently shared his views on the subject. He believes that the Chinese restrictions made bitcoin more powerful.
Katie Haun, a Partner at Venture Capital Firm Andreessen Horowitz (“a16z”), urged American financial regulators not to follow the lead of China.
“This is an opportunity to the United States, because we should do the exact opposite of what China is doing in this area.”
As of now, it seems that the largest economy does not intend to adopt such anti-bitcoin policies. Fed Chair Jerome Powell, and SEC chief Gary Gensler assured that there will be no ban on the use of digital assets.
Marla Brooks – Financial Analysis
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