Chinas central bank on Friday pledged to crack down on the illegal activities of trading Cryptocurrenciesand foreign exchanges were prohibited from providing services to mainland investors via the Internet.
The People’s Bank of China, which has deemed all cryptocurrency-related transactions to be illegal, said it would ban financial institutions, payment firms and internet companies from facilitating cryptocurrency trading, and would strengthen monitoring of risks arising from such activities.
Cryptocurrency stocks fell after China expanded its crackdown on the crypto sector, with Argo Blockchain Plc down 10% in London, while Bitcoin miner Northern Data AG lost 2% in Frankfurt. In US pre-market trading, MicroStrategy Inc, the enterprise software company with more than $5 billion in crypto assets, lost 3.5%. Riot Blockchain Inc and Bit Digital Inc shares are down about 5%.
Comments from the People’s Bank of China sent cryptocurrencies down, markets were on edge as China tightened its grip on sectors ranging from private education to digital gaming, and the debt crisis of property developer Evergrande added to the tension.
Bitcoin is down 7.8% to $41,220, and Ether, EOS, Litecoin and Dash are all down more than 7%.
China imposed heavy scrutiny on the cryptocurrency sector this year, amid growing concerns about the risks of fraud, money laundering and excessive energy use. The country is a dominant player in the cryptocurrency market, and as recently as April had 46% of the global hash rate, a measure of computing power used in mining and processing, according to the Cambridge Bitcoin Electricity Consumption Index.
Chinas central bank says it will continue to pressure the cryptocurrency market, and in July, the central bank pledged to maintain heavy regulatory pressure on cryptocurrency trading and speculation. Chinas crackdown was part of the triggers for the bitcoin price crash in May as the largest cryptocurrency struggled to regain previous highs above $60,000.