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Bank of China declares all crypto deals illegal, Bitcoin crashes

Bank of China declares all crypto deals illegal, Bitcoin crashes
Bank of China declares all crypto deals illegal, Bitcoin crashes
Written by Harry Johnson

Overseas virtual currency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity.

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  • Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies.
  • The world’s number one digital asset by market capitalization dropped over 5% to below $42,000.
  • Other cryptocurrencies followed the declining trend with ether dropping 10% to below $2,800, while dogecoin crashed over 8% to below $0.20.

The People’s Bank of China announced plans to ban financial institutions, money companies and internet enterprises from facilitating cryptocurrency trading, as well as to strengthen monitoring of risks from cryptocurrency business activities.

FILE PHOTO: A small toy figurine is seen on representations of the Bitcoin virtual currency displayed in front of an image of China’s flag in this illustration picture, April 9, 2019. REUTERS/Dado Ruvic/Illustration

Chinese regulator reiterated its rigid stance on digital currencies today, declaring all cryptocurrency trading activities unlawful and prohibiting overseas crypto exchanges from providing services to Chinese investors.

“Overseas virtual currency exchanges that use the internet to offer services to domestic residents is also considered illegal financial activity,” the People’s Bank of China posted to its website.

“Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” the central bank said.

The move sent bitcoin and other virtual currencies plummeting. The world’s number one digital asset by market capitalization, Bitcoin, dropped over 5% to below $42,000. Other cryptocurrencies followed the declining trend with ether dropping 10% to below $2,800, while dogecoin crashed over 8% to below $0.20, according to the Coinmarketcap website.

The latest ruling comes as part of a broader state-run campaign by Chinese regulators against cryptocurrencies. Earlier this year, Beijing banned mining in major bitcoin hubs, such as Sichuan, Xinjiang and Inner Mongolia, which led to a sharp drop in bitcoin’s processing power, as multiple miners took their equipment offline.

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About the author

Harry Johnson

Harry Johnson has been the assignment editor for eTurboNews for almost 20 years. He lives in Honolulu, Hawaii, and is originally from Europe. He enjoys writing and covering the news.

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