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PBOC Launch on-site inspections on China’s Major Exchanges

11th January 2017, 4:47 pm, Beijing time, China’s PBOC issued another announcement that PBOC and Financial Office of Beijing and Shanghai have jointly began to carry out on-site inspections on China’s major exchanges including BTCC, Okcoin and Huobi respectively.

The announcement of PBOC Beijing reads:beijing111

In accordance of the Notice of the State Council on Risk Prevention of Internet Finance and other related laws and regulations, PBOC Beijing together with Financial Office of Beijing have entered Huobi and Okcoin to carry out field inspection from 11th January 2017. The purpose is to examine whether exchanges’  trading of Bitcoin and Litecoin comply with  laws and regulations including Anti-money laundry law and regulations on foreign exchanges and platforms.

 

 

The announcement of PBOC Shanghai reads:

shanghai11

To prevent and lower the risk of Bitcoin and Litecoin trading market, PBOC shanghai and Financial Office of Shanghai have jointly carried out on-site inspections on BTCC. The main focuses it to examine whether BTCC 1)operates outside its statutory scope, carry out loans, payment and foreign exchange businesses,  2)  manipulates market 3) complys with anti-money laundry law 4) has loopholes of funds security

This is the another confirmed move by PBOC to further figure out the current status like anti-money law compliance, foreign exchange regulation compliance of the exchanges several days after it inquired their CEOs.

Again, the news should not be misinterpreted as a ban on Bitcoin in China or a raid in China’s exchanges. It is a strong signal that China’s government wants to regulate the market. The volatility of Bitcoin price in the past month and China’s sheer share in global total trading volume have compelled PBOC to step in to guarantee the financial stability, which is the paramount mission of China. Like we have analyzed in our article Analysis: PBOC’s Possible Stepping in as a Third-party Custodian for Bitcoin Exchanges is Good news, PBOC’s move is no different with its efforts in regulating stock exchanges and futures exchanges.

In 2015, China Stock Commission began to deleverage and oversight futures exchanges, in an attempt to deter the speculation. Now to set up futures exchanges must obtain the approval from the State Council and leveraging rate is under the oversight of China Stock Commission. Now all the four approved major futures exchanges in China are operating normally.

At the press time, all three exchanges are also running without troubles. A staff from Huobi wishing to remain anonymous told 8btc that the exchange is just actively collaborating with PBOC for the examination.

Bitcoin exchanges are indeed “grey areas” in China. PBOC sure understands the lesson of the downfall of Mt. Gox which resulting in losses of Bitcoin equaling 450 million USD. The fact the there are many so-called digital currency platforms are proved Pyramid schemes only strengthens the need to regulate the Bitcoin trading market.

Besides, the three major exchanges are all criticized for faking trading volume and providing too much leveraging. Huobi has been complained for its frequent system failure at peak time when there is great need to withdraw. Thus the possibility that the three exchanges might be fined or even suspended until they comply with all laws and regulations cannot be excluded. Hence, if POBC is just to regulate Bitcoin market, these moves should be welcomed.

COMMENTS(27)

  • hl5460
    6 months ago hl5460

    They focus on whether the enterprise is operating beyond its business scope, whether it is engaged in unlicensed operation of loaning, payment, currency exchange and other related activities, whether there is any market manipulation; the implementation of the anti-money laundering.https://twitter.com/redtheminer/status/819112826606190593

  • mobnepal
    6 months ago mobnepal

    Article seems to be in Chinese, if you can share english version of this article than that will be nice. Tried google translation also but it isn’t working.

  • gizmoh
    6 months ago gizmoh

    The only confirmed exchange so far is BTCC . Not sure of others.https://twitter.com/cnLedger/status/819112379417903104

  • manselr
    6 months ago manselr

    Quote from: gizmoh on January 11, 2017, 10:36:35 AM
    The only confirmed exchange so far is BTCC . Not sure of others.https://twitter.com/cnLedger/status/819112379417903104

    In principle this is good since it will clear if there is something shady going on with the chinese mining business, but this panic sell is so fucking stupid. Whales sell the rumors and then panic sellers follow. Everytime something like this happens the price drops.

  • poloniexwhale
    6 months ago poloniexwhale

    Chinese government is fucking stupid, they afraid people make money from bitcoin-FREEDOM. They are dictatorship country, shame on them, every big pump is destroyed by those morons.

  • ETFbitcoin
    6 months ago ETFbitcoin

    Quote from: poloniexwhale on January 11, 2017, 01:00:56 PM
    Chinese government is fucking stupid, they afraid people make money from bitcoin-FREEDOM. They are dictatorship country, shame on them, every big pump is destroyed by those morons.

    Then you should proof that Chinese government really take bitcoin freedom since all big exchange in most country is regulated and follow KYC rules In US, things is worse because stupid BitLicense. I think there won’t be any problem if those Chinese exchange don’t have anything bad to hide.Don’t be fooled by FUD.

  • franky1
    6 months ago franky1

    Quote from: franky1 on January 11, 2017, 01:40:28 PM

    “chinese” exchanges have been in constant communication with PBOC for years.this topic is exaggerating a ‘routine’ inspection by regulators* into something sounding more like a raid.it is not a raid. its just a routine inspectionseems like the OP wants to cause drama to cause some speculation and another discount day to buy in cheap. and when people wise up to the truth and price then recovers, the OP can sell for profit.*(yep many finance firms in fiat, asset and commodities get these as something treated as normal processes)Quote
    The operation is focused on checking whether the company is operating beyond its scopeBTCC for example has a regulatory agreement of what its business will do (scope of business).the regulators are just doing a routine inspection to check drama overtip: this is temporary speculation drama. do not consider it a panic moment to cry about losses, consider it a discount day to increase holdings cheaply

  • poloniexwhale
    6 months ago poloniexwhale

    Quote from: ETFbitcoin on January 11, 2017, 02:37:45 PM

    Quote from: poloniexwhale on January 11, 2017, 01:00:56 PM
    Chinese government is fucking stupid, they afraid people make money from bitcoin-FREEDOM. They are dictatorship country, shame on them, every big pump is destroyed by those morons.

    Then you should proof that Chinese government really take bitcoin freedom since all big exchange in most country is regulated and follow KYC rules In US, things is worse because stupid BitLicense. I think there won’t be any problem if those Chinese exchange don’t have anything bad to hide.Don’t be fooled by FUD.

    Governments hate bitcoin because bitcoin is the currency of freedom and liberty, China is more stupid than US. But they are all bad treating bitcoins.

  • franky1
    6 months ago franky1

    Quote from: poloniexwhale on January 11, 2017, 03:17:48 PM
    Governments hate bitcoin because bitcoin is the currency of freedom and liberty, China is more stupid than US. But they are all bad treating bitcoins.

    they dont.remember this one simple truth..for every bitcoin buyer there is a bitcoin seller. meaning the chinese FIAT does not disappear, all that ultimately happens in a bitcoin trade is the name of the bank account holders of X fiat change hands.what governments hate is people putting paper money into an envelope and sending the money out of the control of chinese banks. where it sits in some western union/bureau de change office vault in some unknown town. doing nothing and not circulating in the country of origin.what governments hate is people not paying their taxes.. this is not a bitcoin direct issue, but an international currency issue of claiming non residence or having tax havens to avoid paying local taxes.what governments hate is people making a financial loss, to claim it as a tax writeoff and hand less tax to the government

  • Mometaskers
    6 months ago Mometaskers

    Wasn’t China coming up with a digital fiat? They can benefit from a big dump if they intend to buy a lot of bitcoins (like some banks and companies are doing now). On second thought, that would be bad for them, people might lose their trust on the crypto. Maybe they are really just going after what they see as tax evasion. True China is a dictatorship, a communist country only in name but let us not forget that some of those money really could have been earned illegally. For example, the Chinese are heavily involved in the drug trade in Asia. Drug manufacturing and trade itself is punishable by death in China so they manufacture those drugs in other countries instead, for example the Philippines. Drugs for the Chinese market are carried by Filipino mules but portion of the goods are also sold locally. Now if I’m a drug manufacturer in the Philippines, how would I send the money back to my boss in China?

  • franky1
    6 months ago franky1

    Quote from: Mometaskers on January 11, 2017, 06:48:09 PM
    Wasn’t China coming up with a digital fiat? They can benefit from a big dump if they intend to buy a lot of bitcoins (like some banks and companies are doing now). On second thought, that would be bad for them, people might lose their trust on the crypto. Maybe they are really just going after what they see as tax evasion. True China is a dictatorship, a communist country only in name but let us not forget that some of those money really could have been earned illegally. For example, the Chinese are heavily involved in the drug trade in Asia. Drug manufacturing and trade itself is punishable by death in China so they manufacture those drugs in other countries instead, for example the Philippines. Drugs for the Chinese market are carried by Filipino mules but portion of the goods are also sold locally. Now if I’m a drug manufacturer in the Philippines, how would I send the money back to my boss in China?

    chinese government are not buying bitcoin. they have regulations that the BANKS can only handle FIAT..its citizens not governments that are speculating.. and at that its not 1.3billion citizens but just a few hundred or thousand citizens.. again not governments.the government is involved in the IMF hyperledger. not bitcoin.the government is not attacking bitcoin but just doing a routine inspection of any financial institution that is half involved with fiat trading.. even if the other half was a stock, commodity, asset or foreign currency.soo much FUD is spread purely to create speculative panic..

  • eddie13
    6 months ago eddie13

    Quote from: franky1 on January 11, 2017, 02:44:10 PM

    Quote from: franky1 on January 11, 2017, 01:40:28 PM

    “chinese” exchanges have been in constant communication with PBOC for years.this topic is exaggerating a ‘routine’ inspection by regulators* into something sounding more like a raid.it is not a raid. its just a routine inspectionseems like the OP wants to cause drama to cause some speculation and another discount day to buy in cheap. and when people wise up to the truth and price then recovers, the OP can sell for profit.*(yep many finance firms in fiat, asset and commodities get these as something treated as normal processes)Quote
    The operation is focused on checking whether the company is operating beyond its scopeBTCC for example has a regulatory agreement of what its business will do (scope of business).the regulators are just doing a routine inspection to check drama overtip: this is temporary speculation drama. do not consider it a panic moment to cry about losses, consider it a discount day to increase holdings cheaply

    Just what you would expect the chinese to say to the west while they dump on your heads..

  • eddie13
    6 months ago eddie13

    Quote from: franky1 on January 11, 2017, 03:49:35 PM

    Quote from: poloniexwhale on January 11, 2017, 03:17:48 PM
    Governments hate bitcoin because bitcoin is the currency of freedom and liberty, China is more stupid than US. But they are all bad treating bitcoins.

    they dont.remember this one simple truth..for every bitcoin buyer there is a bitcoin seller. meaning the chinese FIAT does not disappear, all that ultimately happens in a bitcoin trade is the name of the bank account holders of X fiat change hands.what governments hate is people putting paper money into an envelope and sending the money out of the control of chinese banks. where it sits in some western union/bureau de change office vault in some unknown town. doing nothing and not circulating in the country of origin.what governments hate is people not paying their taxes.. this is not a bitcoin direct issue, but an international currency issue of claiming non residence or having tax havens to avoid paying local taxes.what governments hate is people making a financial loss, to claim it as a tax writeoff and hand less tax to the government

    China hates personal liberty..Bitcoin is for not giving a shit what governments think..Look here, currently what governments think is influencing/destroying bitcoin.. gov wants this, banks want that…

  • franky1
    6 months ago franky1

    Quote from: eddie13 on January 11, 2017, 08:27:15 PM

    Quote from: franky1 on January 11, 2017, 02:44:10 PM

    Quote from: franky1 on January 11, 2017, 01:40:28 PM

    “chinese” exchanges have been in constant communication with PBOC for years.this topic is exaggerating a ‘routine’ inspection by regulators* into something sounding more like a raid.it is not a raid. its just a routine inspectionseems like the OP wants to cause drama to cause some speculation and another discount day to buy in cheap. and when people wise up to the truth and price then recovers, the OP can sell for profit.*(yep many finance firms in fiat, asset and commodities get these as something treated as normal processes)Quote
    The operation is focused on checking whether the company is operating beyond its scopeBTCC for example has a regulatory agreement of what its business will do (scope of business).the regulators are just doing a routine inspection to check drama overtip: this is temporary speculation drama. do not consider it a panic moment to cry about losses, consider it a discount day to increase holdings cheaply

    Just what you would expect the chinese to say to the west while they dump on your heads..

    im a brit. i just hate the FUD that turns into sheeple scripts everyone repeats and circle jerks to

  • BitcoinAllBot
    6 months ago BitcoinAllBot

    Here is the link to the original comment thread. Or you can comment here to start a discussion. Author: 8btccom

  • eddie13
    6 months ago eddie13

    Quote from: franky1 on January 11, 2017, 08:33:08 PM

    Quote from: eddie13 on January 11, 2017, 08:27:15 PM

    Quote from: franky1 on January 11, 2017, 02:44:10 PM

    Quote from: franky1 on January 11, 2017, 01:40:28 PM

    “chinese” exchanges have been in constant communication with PBOC for years.this topic is exaggerating a ‘routine’ inspection by regulators* into something sounding more like a raid.it is not a raid. its just a routine inspectionseems like the OP wants to cause drama to cause some speculation and another discount day to buy in cheap. and when people wise up to the truth and price then recovers, the OP can sell for profit.*(yep many finance firms in fiat, asset and commodities get these as something treated as normal processes)Quote
    The operation is focused on checking whether the company is operating beyond its scopeBTCC for example has a regulatory agreement of what its business will do (scope of business).the regulators are just doing a routine inspection to check drama overtip: this is temporary speculation drama. do not consider it a panic moment to cry about losses, consider it a discount day to increase holdings cheaply

    Just what you would expect the chinese to say to the west while they dump on your heads..

    im a brit. i just hate the FUD that turns into sheeple scripts everyone repeats and circle jerks to

    I meant to reply to what the info out of china is supposedly rather than your take on it.. I meant, ofcourse they would downplay the situation so they can keep us buying while they GTFO (dump on our heads)You ever hear of any other troubled exchange in crypto history NOT tow the line “it is fine it is fin, nothing to see here” so they can keep their gig going as long as possible in order screw everyone that believes it and make out the best themselves?BTCC “We are in huge trouble guys, the commies are coming to crush our business and this liberty..”Not likely..BTCC “It’s not as bad as it looks, no reason to be afraid, trust us”More likely.. For all we know they are doing the oppressive commie’s bidding else have their organs harvested..

  • QuestionAuthority
    6 months ago QuestionAuthority

    Why you frucking asians always think everybory running illregal exchange? Mind you own biness! Market manipruration not you probrem. Fruckers

  • franky1
    6 months ago franky1

    Quote from: QuestionAuthority on January 11, 2017, 11:06:30 PM

    Why you frucking asians always think everybory running illregal exchange? Mind you own biness! Market manipruration not you probrem. Fruckers

    he is french though.. lol

  • tbonetony
    6 months ago tbonetony

    Quote from: poloniexwhale on January 11, 2017, 01:00:56 PM
    Chinese government is fucking stupid, they afraid people make money from bitcoin-FREEDOM. They are dictatorship country, shame on them, every big pump is destroyed by those morons.

    I think they are fucking smart.This could be just a very starting step in a much larger grand scheme. What if after this audit they are able to cleanse the crap out then legalize btc or exchanges afterwards? That would put a authentic tag on btc as an investable asset. Guess what? Cash hoarders (apparently there are a lot) will have another alternative to run into. Do you still remember what happened to gold not long ago?Above is just my speculation but i do view this as a positive regardless. The panic sell will wash out traders and return btc back to a healthier status. Believers could prosper in the long run.

  • Velkro
    5 months ago Velkro

    Quote from: hl5460 on January 11, 2017, 09:41:23 AM
    They focus on whether the enterprise is operating beyond its business scope, whether it is engaged in unlicensed operation of loaning, payment, currency exchange and other related activities, whether there is any market manipulation; the implementation of the anti-money laundering.https://twitter.com/redtheminer/status/819112826606190593
    Nothing good will come from that, but i hope price will be stabilised on 750$ level, not less.Who knows tho, its totally unpredictible.China is big factor in bitcoin world, USA is behind this time.

  • hl5460
    5 months ago hl5460

    11th January 2017, 4:47 pm, Beijing time, China’s PBOC issued another announcement that PBOC and Financial Office of Beijing and Shanghai have jointly began to carry out on-site inspections on China’s major exchanges including BTCC, Okcoin and Huobi respectively.The announcement of PBOC Beijing reads:http://news.8btc.com/pboc-onsite-inspection-exchanges

  • LLec
    5 months ago LLec

    So does this mean even more decrease in the price if they find some ill advised exchanges being done during these inspections?I thought they were going to start them in a week. This is not so good with the hammering the price took yesterday.

  • hl5460
    5 months ago hl5460

    Quote from: LLec on January 12, 2017, 02:47:46 AM
    So does this mean even more decrease in the price if they find some ill advised exchanges being done during these inspections?I thought they were going to start them in a week. This is not so good with the hammering the price took yesterday.
    Price will find its own way. The site inspection started yesterday.

  • notthematrix
    5 months ago notthematrix

    Quote from: hl5460 on January 12, 2017, 02:53:20 AM

    Quote from: LLec on January 12, 2017, 02:47:46 AM
    So does this mean even more decrease in the price if they find some ill advised exchanges being done during these inspections?I thought they were going to start them in a week. This is not so good with the hammering the price took yesterday.
    Price will find its own way. The site inspection started yesterday.
    Bitcoin is decentralized if iut needs to move out of china and go stealth it will.It will evolve like it always did.

  • Karartma1
    5 months ago Karartma1

    Quote from: hl5460 on January 12, 2017, 02:53:20 AM

    Quote from: LLec on January 12, 2017, 02:47:46 AM
    So does this mean even more decrease in the price if they find some ill advised exchanges being done during these inspections?I thought they were going to start them in a week. This is not so good with the hammering the price took yesterday.
    Price will find its own way. The site inspection started yesterday.

    This could explain the last drop. But I definitely agree that the price will find its own way. Many had a good chance to jump off the train with a bag full of profit and they did. We go in cycles, if we do understand this that’s enough.Those of us see the true bitcoin potential will stay here as long as it takes.

  • BellaBitBit
    5 months ago BellaBitBit

    Quote from: Karartma1 on January 12, 2017, 01:01:42 PM

    Quote from: hl5460 on January 12, 2017, 02:53:20 AM

    Quote from: LLec on January 12, 2017, 02:47:46 AM
    So does this mean even more decrease in the price if they find some ill advised exchanges being done during these inspections?I thought they were going to start them in a week. This is not so good with the hammering the price took yesterday.
    Price will find its own way. The site inspection started yesterday.

    This could explain the last drop. But I definitely agree that the price will find its own way. Many had a good chance to jump off the train with a bag full of profit and they did. We go in cycles, if we do understand this that’s enough.Those of us see the true bitcoin potential will stay here as long as it takes.

    I also agree that the price will find its own way.  This is likely the reason for the recent drop and as this shakes out there should be a new normal.  Frequent “inspections” to these exchanges won’t help much with PR for bitcoin, especially in China, but bitcoin always recovers from PR issues.  I am grabbing more on this recent downtrend.

  • hl5460
    5 months ago hl5460

    Here is the formal reporthttp://news.8btc.com/pboc-onsite-inspection-exchanges

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