BTC China Suspends Chinese Merchants Bank Deposits

BTC China, the largest Bitcoin exchange in the country, has halted local-currency deposits to clients’ China Merchants Bank Co. accounts.

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BTC China Suspends Chinese Merchants Bank Deposits

BTC China, the largest Bitcoin exchange in the country, has halted local-currency deposits to clients’ China Merchants Bank Co. accounts. The move comes amid the People’s Bank of China’s crackdown on trading in digital currency.

The announcement was made on BTC China’s Weibo page (Weibo is a Chinese social network) and explains that the move aims to protect the security of clients’ funds and safeguard stable operations. Merchants Bank banned the use of accounts making Bitcoin transactions, including vouchers and recharge codes, according to an official statement dated April 25.

Bobby Lee, CEO of BTC China, said “We saw the bank’s statement and took the initiative,” although clients can use accounts through other lenders thus not effecting exchange’s operations.

The vouchers, or deposit codes, were a way BTC exchanges could skirt previous bans implemented by the People’s Bank of China (PBOC). They were directly addressed by a PBOC official who looks to close that loophole:

“The current level of services that banks and third-party payment processors provide counts as directly providing services to Bitcoin related companies. Online stores and public marketplaces that sell or trade ‘deposit codes’ from Bitcoin exchanges counts as indirectly providing services to Bitcoin related companies.”

As of the writing of this article (April 28) the price of Bitcoin has plunged severely to below $430. About 10% of Bitcoin trades around the world are represented by the Chinese yuan, which is the second-most used currency in Bitcoin trade behind the US dollar. 

In December 2013 the PBOC banned financial institutions from dealing in digital currency. Even last week Lee claimed he had received no formal notice about an April 15 deadline given by the PBOC demanding any Bitcoin exchanges to close their accounts.

We will keep you updated on the matter as it unfolds.

 

 

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