China Makes Crypto Transactions Illegal, Prompting Bitcoin Market Crash

It's a game called whack-amole.
Crypto Crackdown

China has made all cryptocurrency transactions illegal and related activities inside its borders. This massive crackdown has caused Bitcoin to plummet yet again.

The cryptocurrency plummeted from a high of over $45,000 on Friday morning to below $41,000 at 7 AM Eastern.

In a Q&A posted on its website, the Peoples Bank of China announced the news. The post, translated by CNBC, states that virtual currency exchanges operating overseas and offering services to residents of their country are also illegal financial activities.

Foreign crypto exchange workers will be investigated. The Bank announced that it is upgrading its systems to monitor crypto related activities.



The crypto market in China seems to have ended, at least temporarily.

Stamping it Out

This news comes just days after China cracked down on cryptocurrency mining, days after it banned all payment companies and financial institutions from conducting any business with cryptocurrencies.

According to a statement made by the South China Morning Post, the Chinese government will clamp down on bitcoin trading and mining, and prevent individuals from transferring individual risks to society.

Similar to today, Bitcoin's value also plummeted due to previous crackdowns. Bloomberg reports that Bitcoin's value fell by approximately half between April 2017 and July 2018.



To meet its ambitious carbon goals, the government maintained that it is also cracking down energy-intensive cryptocurrency mining activities. The country plans to be carbon neutral by 2060.

Cat and mouse

This weeks announcement didn't surprise cryptocurrency companies.

Vijay Ayyar (head of Asia Pacific for cryptocurrency exchange Luno in Singapore), stated that the Chinese regulators have been extremely extreme in their views.

It is interesting to note that China continues to make announcements about cryptocurrency activities.



Avyar said that the interesting thing is why they keep making these statements. They sense that China is continuing unabated activity and therefore have to keep going.

READ MORE: Bitcoin drops 8% and ethereum falls 11% in China's crackdown on cryptocurrency [CNBC], which teaches users not to get scammed, gets hacked and replaced with scam

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