China cracks down on illegal crypto exchanges, Bitcoin drops by $500

In the ever-volatile world of cyrptocurrencies, Bitcoin has cemented itself as the world's foremost choice for those looking to use blockchain technology to make purchases. In fact, about a week ago, Bitcoin even briefly passed the $5,000 mark, quickly thereafter dropping to around $4,700. Recent news out of China however has impacted the currency's value to a larger extent.

Following a report from Caixin, in which the publication revealed China's intention to ban "virtual exchanges trading digital currencies with the yuan", the value of Bitcoin has dropped by a further $500 to $4,263.

According to Caixin's source, this move on the Asian country's part could affect major exchanges like OKCoin and Huobi, due to the authorities' intention to curb the activity of "platforms facilitating trading between virtual currencies and legal tenders". The source further went on to say that this ban is specifically targeted at "unauthorized trading at virtual currency exchanges", and not the blockchain technology itself.

As of yet, neither OKCoin nor Huobi - two of the largest platforms of their kind in the country - have been ordered to cease activity, with China's central bank refusing to comment on this report.

Between China's ban of Initial Coin Offerings - the cryptocurrency equivalent of IPOs - due to them being seen by authorities as "unauthorised and illegal public fundraising" and the freezing of bitcoin withdrawal (rectified in June), it is unclear at the moment what China's definition of "unauthorized trading" is and to what extent it will affect the aforementioned digital currency exchanges.

Source: Business Insider (Netherlands)

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