Chinese exchanges have begun requiring customers to provide details of the source of cryptocurrency funds and where they will be withdrawn to.
The information, a first for the Chinese cryptocurrency market, suggests exchanges will shortly re-allow Bitcoin withdrawals after a month-long pause.
With this step, we expect #bitcoin withdraws from major exchanges become available soon.— cnLedger (@cnLedger) March 21, 2017
In a letter from one exchange, Huobi, translated by local news resource cnLedger, reference is made to “AML regulations by government departments” as the root motivation for requesting the details.
The letter states:
“According to AML regulations by government departments including the Central Bank and China Banking Regulatory Commission, you are required to provide explanation of the sources of your funds, and the destinations of the crypto-coins you withdraw.”
In a curious measure in terms of security, customers appear to be required to turn over exchange login details as part of the procedure.
In terms of withdrawal “destinations,” bank account information must be supplied, along with “explanations of the sources of the funds transferred” and “relevant proof that can back up [the explanations].”
CnLedger stresses the information is as yet unconfirmed.
Chinese Bitcoin investors have renewed trading activities on alternative resources such as LocalBitcoins over the past week ahead of likely regulatory movements.
LocalBitcoins trading remains unregulated in China, the market setting constant new highs week on week in the seven days to March 18, transferring over 60 mln yuan.