Chinese banks begin to close accounts in Bitcoin crackdown

Summary:Following reports that China's central bank wanted to crack down on Bitcoin trades, a number of trading posts have issued advisory notices.

bitcoins-pile-620x202-620x202

The Chinese central bank's Bitcoin ban is taking form as Chinese Bitcoin exchanges begin to stop the flow of withdrawals.

Last week, Chinese publications reported that the People's Bank of China (PBOC) was set to enforce a ruling, taking effect on April 15, which would actively annihilate the services of Bitcoin trading posts in the middle kingdom.

The PBOC ruling stated that "all accounts opened by the operators of websites that trade in the virtual currency" through banks and payment firms had to close, and close soon. With Bitcoin business effectively banned in the country — and the only way to purchase the currency now through cold, hard cash — trading posts have to move their servers abroad and use foreign payment firms to keep going, or shut their doors.

Read this

The Mt. Gox bitcoin debacle: Bankruptcy filed, customer bitcoin lost

UPDATE: Mt. Gox has closed the bitcoin exchange and filed for bankruptcy in Japan.

The ruling was set in place after the PBOC decided that Bitcoin should be considered a commodity rather than currency, and so consumers need to understand it is not legal tender and will not be treated as such.

Following these reports, two Chinese Bitcoin exchanges have issued advisory warnings to their users this week.

The FXBTC posted a notice stating that instructions to stop customer withdrawals were received by telephone call, as part of the bank's "Bitcoin risk prevention work." The Bitcoin exchange added that some banks have asked for accounts to be cancelled within the next few days, and the central bank will not provide "clearing services" for Bitcoin-based businesses.

Due to the rapid orders, FXBTC said as of April 3, it would "no longer deal with bank recharge after Sunday, [and] suspend bank card withdrawals."

A separate Bitcoin exchange, BTC38, has also posted a notice containing similar instructions. Customer withdrawals have been suspended and the firm intends to comply with the central bank's demands, but reassures users that it their balances will not be lost because of the ruling.

Topics: China

About

Charlie Osborne, a medical anthropologist who studied at the University of Kent, UK, is a journalist, freelance photographer and former teacher. She has spent years travelling and working across Europe and the Middle East as a teacher, and has been involved in the running of businesses ranging from media and events to B2B sales. Charli... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.