Shanghai Closes All Token Trading and Executives Are Asked to Stay in Place
Cryptocurrency exchanges in Shanghai this week are asked to close all token trading services, including BTC/CNY, ETH/CNY and other trading pairs. The latest move means that bitcoin trades on secondary markets are excluded from exchanges in Shanghai. Beijing regulatory authorities haven’t released any notice on closing cryptocurrency trading pairs.
OK and Huobi on Sept 15 announced that they would only suspend CNY-related businesses and other services are not affected. But on the very next day, they revised the notice saying they are to stop all cryptocurrency trading.
How long will the condition persist?
On Sept 22, vice president of the PBOC Yi Gang noted on Financial Inclusion Summit that “The licensing scheme is applicable to all financial activities.” Bitcoiners post his words here and there and interpret that bitcoin exchanges are able to operate with a special licence.
But a famous financial commentator Xiao Lei holds a different opinion on it.
“At the moment, I don’t think the Chinese government will offer a new licence to bitcoin exchanges. In the Chinese financial markets, only Alipay and several other third-party payment platforms hold an operator’s licence.”
Xiao Lei notes that Internet finance props up the real economy. Though it’s kind of cliché to mention real economy. But for a nation, real economy means jobs and stability. Bitcoin-related businesses are technology-intense instead of labor-intense and couldn’t create a great deal of jobs.
“Issuing a new licence means “opening the front door” to welcome newcomers to race in the industry. It needs a complete set of regulatory strategies and market access mechanism. Regulators are not going to study on this.”
Xiao lei believes that it could take at least five years to reopen the exchanges.
As tough regulations are imposed on bitcoin exchanges, the community are concerned that closing bitcoin mining farms or OTC trading will be regulators’ next move.
In this regard, an insider reveals that no plan so far to ban bitcoin mining. But he adds that there will be some restraints on capital flows for bitcoiners to trade on overseas exchanges.
He says that the main task now is for exchanges to carry out the refund process smoothly. As some exchanges are slow in refund, investors are looking for help from police.
The insider points out that exchanges, project initiators and investors should negotiate a proper refund price on tokens. No government departments can help decide on the price. But investors should seek for judicial assistance if negotiations failed.
Now Shanghai regulatory agencies have asked politely that executives of exchanges and ICO platforms to stay in place as a way of making sure the closure and refund is processed smoothly. So do those in Beijing. Li Lin, president of Huobi and Justin Pan, COO of OKCoin were supposed to have a speech at Bitcoin: Shape the Future held in Hong Kong last weekend. But they didn’t show up and their speeches were cancelled.