China Concerned over Return of Cryptocurrency Trading Following Bitcoin Price Spike


Chinese regulators are on high alert over risk issues in relation to Bitcoin trading by domestic investors following a 300% surge in the iconic cryptocurrency since October.

The Chinese securities authority told its regional offices to step up scrutiny of cryptocurrency trading, according to a regulatory source who spoke to Reuters.

The source said that some Chinese individuals are shifting capital abroad for cryptocurrency investments on peer-to-peer marketers by claiming that they are making legitimate purchases for items such as medical goods.

China first placed a ban on initial coin offerings and domestic cryptocurrency exchanges at the end of 2017 due to concerns over risk in relation to speculative investment frenzies. China had previously comprised around 90% of global bitcoin trading.

Domestic investors are still able to trade bitcoin on Chinese exchanges that have shifted their operations abroad, such as Huobi and OKEx.

While these exchanges do not hold licenses for domestic operation within China, Chinese citizens can still use their official identity information to register accounts with these offshore exchanges for online cryptocurrency trading purposes, given that they lie beyond the remit of Chinese regulatory authorities.