Three Bitcoin Operators Resume Withdrawals

(Beijing) – China’s top three bitcoin trading platforms have resumed allowing withdrawals, following a suspension of transactions in February during a government crackdown on money-laundering and illegal foreign exchange practices.

Earlier this year, the central bank met with several major operators of exchanges for the virtual currency and urged them not to engage in margin trading, money-laundering or other practices that would violate regulation of foreign exchange.

Shortly after that, Huobi.com, BTCChina and OKCoin suspended withdrawal services, and initiated a system upgrade to prevent money-laundering.

A source with one of the major exchanges told Caixin that the curb on withdrawing bitcoins from the exchanges was designed to prevent illegal transactions before the system overhaul.

Huobi.com said it has been gradually resuming withdrawal service after completing an upgrade of its system to protect against money-laundering. The new system will enforce stricter monitoring of user transactions in order to reduce such risks, it said.

BTCChina told Caixin that its system upgrade is almost done, and it is trialing a resumption of withdrawal services while scrutinizing user transactions. Multiple sources with OKCoin also confirmed that they have resumed withdrawal services.

China is the world’s third-largest bitcoin market with 10% of global trading, behind 46% for Japan and 26% for the U.S.

The resumption will bring greater liquidity to the virtual currency market, said Zhang Jun, a researcher with Taiyi Strategic Research Institute. In the short term there may be some congestion and adjustment because of technical issues, but in the long term the upgraded systems should have a positive impact on the market, he added.

Prices for the highly speculative virtual currency have been fluctuating dramatically recently. In mid-May, the price went beyond 10,000 yuan ($1,469) and soared to 19,000 yuan on May 25. In the following two days, it fell back to 14,000 yuan, and now trades around 17,000 yuan.

OKCoin and Huobi.com on May 31 also opened transactions on another popular virtual currency called ethereum (ETH).

Bitcoin has dominated the virtual currency market in the past, accounting for 90% of the total value of all virtual currencies at its height. But by the end of April, the currency’s share fell to 62.3%.

Contact reporter Wu Gang (gangwu@caixin.com)