The People’s Bank of China, after an initial investigation, has reportedly found abnormalities in the work of the country’s largest crypto exchanges BTCC, OKCoin and Huobi.
According to the regulator, some flaws in the operation of the trading platforms was the reason behind the recent “abnormal fluctuations” in the bitcoin market. In particular, the central bank experts have found an evidence of margin trading on crypto exchanges, the practice currently under suppression nationwide.
The report states that some activities of the exchanges do not comply with anti-money laundering and other related regulations, write Chinese news agencies Hexun and Jiefang Daily. The regulator carries on the investigation.
The People’s Bank of China used the chance to remind institutions and individual investors of financial risks associated with cryptocurrency trading and urge them to safeguard their property and financial security.
Representatives of China’s bitcoin community replied with a series of reassuring statements. According to them, the results of the People’s Bank inspections were mostly expected, while the leaked information lacks substantial details as to what was discovered, CoinDesk reports.
BTCC exchange has confirmed its intention to carry on active cooperation with the authorities to rectify any faults. As BTCC CEO Bobby Lee explained, he cannot confirm or deny the information but will be looking forward to final results to determine how the market can adjust to government regulation.
Over the last 24 hours, bitcoin volatility reached 5.6%. The cryptocurrency exchange rate first fell from $900 to $850, rising again later to $890.
On 7 January, the People's Bank of China announced it would carry out inspections at major bitcoin exchanges looking for a possible breach of current financial regulations. The news resulted in a collapse of bitcoin price, which shortly before that had reached its historical maximum at $1153. As the alarming information about the inspections leaked, bitcoin lost 20% in one day and fell to $820. A few days later BTCC and Huobi stopped margin trading, while OKCoin reduced leverage to 1x.
Elena Platonova
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