As days go by, bad news keep coming and hitting hard the cryptocurrency markets. It has been a rough beginning of the year for digital currencies and the trend doesn’t seem like to be about to change anytime soon. The markets have taken a sharp downturn and have reached multi-month lows across the board. This time, the bad news comes from China and has already deeply affected virtual currencies.
The Chinese government has announced that it will ban foreign cryptocurrency exchanges and every ICO-related websites from now on. Reports are coming from the South China Morning Post and sources are also linked to the People’s Bank of China. This new regulation has been looming over cryptocurrency exchanges for a long time in China. Chinese lawmakers wanted to have stricter laws for foreign exchanges than those currently in place. It is now the case as the breaking news shatter the crypto markets. According to the government, these foreign trading platforms are very dangerous and can incur financial risks. As a result of this news, the markets have dipped even more on Monday and Tuesday.
Quoting the People’s Bank of China, the South China Morning Post read that regulators have stated: “To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs” One can wonder why only foreign exchanges are banned and not Chinese ones as well.
It is interesting to see that regulators across the world are still very concerned about the potential risks and potential financial losses that can occur when trading cryptocurrencies. Lawmakers in a lot of nations are also concerned about individuals using digital currencies for illegal activities like terrorism funding, purchasing drugs, or financial fraud. Will we see other countries directly banning exchanges in the near future?
TLDR: China has banned foreign cryptocurrency exchanges and ICOs. This news has deeply affected the markets as most cryptocurrencies took a sharp downturn and reached multi-month lows.