People’s Bank of China have outlawed all cryptocurrency-related transactions

Major cryptocurrency prices have been trending downwards, as traders took stock of the fallout from Beijing’s crackdown on mining. 

Prices fell on Tuesday afternoon in London, eroding gains made on Monday. Prices had tumbled last Friday,  as the People’s Bank of China (PBOC) said all cryptocurrency-related transactions were illegal. These had staged a small recovery yesterday as markets took a breather. 

By 12.15 pm in London on Tuesday, Bitcoin had lost 3.9 per cent to trade at US$41,916, edging further away from the key US$50,000 point. Ethereum, having broken above the level seen last week before the ban at US$3,100, fell 5.8 per cent to US$2,911. 

Yahoo Finance reports that crypto markets were unsettled on Friday when the PBOC vowed to crack down on illegal activities of cryptocurrency trading and banned overseas exchanges from providing services to mainland investors. The PBOC said it would stop all companies from facilitating crypto-currency trading and will strengthen monitoring of risks from such activities.

The PBOC in declaring that  all cryptocurrency-related transactions were illegal closed a loophole exploited by investors.

“By prohibiting Chinese citizens from holding accounts in offshore exchanges, the PBOC closed a loophole exploited by investors,” explained Naeem Aslam, chief market analyst at AvaTrade.

He added that, “furthermore, the ban extends to crypto exchanges from hiring resources domestically in China for roles such as marketing and sales, limiting their ability to provide services to Chinese consumers”.

Two of the world’s largest Bitcoin exchanges, Binance and Huobi, have halted new registrations for Chinese users and one will retire current accounts, taking actions to comply with Beijing’s latest ban.

Alibaba, an e-commerce giant, also moved to wrap up crypto-related services, saying on Monday that from October 8, its platform will stop sales of cryptocurrency miners and suspend categories for blockchain miners and accessories.