China Orders Closure of Software Company For Crypto Trading
Last updated on December 4th, 2022 at 10:49 pm
China’s Central Bank has ordered the closure of a software company based in Beijing for allegedly involving itself with crypto trading. The recent announcement seeks to enforce the crypto restrictions imposed in the country.
Authorities in the country ordered the immediate suspension of activities at Beijing Qudao Cultural Development Co Ltd.
According to the statement, the firm was engaging in crypto trading, which has become a prohibited activity.
The website of the software firm has also been deactivated. The statement was backed by the People’s Bank of China and the Beijing financial supervision administration.
In addition, the relevant bodies stated that firms operating in Beijing should refrain from any activity that deems to promote crypto trading.
This includes bots offering venues for crypto trading and halting any advertisements related to cryptocurrencies.
China Bans Firms From Crypto
In late May, China banned financial and payment firms from extending any services related to cryptocurrencies. The relevant authorities also warned investors to stay away from crypto trading because of the high risks associated with the activity. The regulators also stated that crypto volatility posed a risk to the economy and financial market.
The move was seen to be a way for the regulators to halt the booming digital asset in the country. The terms of the ban stated that any financial institution was prohibited from offering any services related to cryptocurrencies, including trading, registration or settlement.
Later in June, the regulators further tightened crypto regulations by banning speculating cryptocurrency trading. The People’s Bank of China stated that speculative trading with digital assets promoted illegal activities such as money laundering and posed a risk to people’s wealth.
The financial body also stated that account holders who were trading with cryptocurrencies needed to discontinue the activity. To this end, the bank called upon the relevant financial firms to halt any forms of payments made to crypto firms and other related services.
Some of the financial and payment institutions called upon to help with the crackdown on cryptocurrencies include China Construction Bank and Alipay. The crypto trading restrictions came a few weeks after the China State Council imposed tighter restrictions on Bitcoin trading and Bitcoin mining.
Beijing’s crackdown on cryptocurrencies has been high, hence causing wariness among investors. Thus, the ongoing regulatory climate in China continues to stir restlessness and is consider to be one of the major factors affecting crypto prices.
Since the crackdown started in May, Bitcoin has shed around 40% of its value, with most of these losses attributed to the harsh regulations from Chinese financial market bodies. Moreover, the crackdown on mining activities has led to the closure of mining firms in China, in what is being termed as the ‘Mass Miner Exodus.’
The closure of mining firms such as Huobi mall and BTC.TOP has affected the Bitcoin mining hashrate and this has affected prices. It remains to be seen whether the news of the closure of the software company in Beijing for crypto trading will affect BTC’s price action.
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