China might shut down domestic cryptocurrency exchanges, The Wall Street Journal reported Monday citing anonymous sources.
The report shocked the cryptocurrency market and the Bitcoin price dropped to a low of $4,108 following the news, according to CoinDesk.
The unnamed sources quoted “too much disorder” as the reason for the alleged closure of Bitcoin exchanges in China.
Last week, the People’s Bank of China (PBOC) approved a ban on initial coin offerings (ICOs). ICO is an unregulated means of crowd funding via the use of cryptocurrency and is applied by cryptocurrency businesses as an alternative to the rigorous and regulated capital-raising process required by venture capitalists, banks, or stock exchanges. In 2013, China imposed a ban on the cryptocurrency from all banks and financial institutions.
The unnamed sources told the Journal that exchanges have yet to receive a clear directive regarding the shutdown from Chinese regulators. An exchange – which name wasn’t disclosed – was reportedly informed by one regulator that the decision had already been made. However, another regulating body said that the decision could take effect in a few months.
OKCoin, a Bitcoin exchange in China, told The Verge in a statement that it hasn’t received any notice from authorities about the shutdown.
“Till now we haven’t informed by any authorities about closing BTC exchanges, if that happens we will show notifications on our website in no time. Even if that’s the case, we would be running offline trading for users, and your balance of coins in your account will be absolutely safe,” the Bitcoin company said in the statement.
Many people believe that the shutdown is just a rumor. Bobby Lee, CEO and co-founder of BTCC; the first bitcoin exchange in China, tweeted a poll asking followers whether the shutdown news fake or real. At the time of writing this piece, 83% of respondent said the news is fake.
The news damaged the Bitcoin price and made investors worried. But there is no official statement issued by Chinese authorities regarding the cryptocurrency exchanges shutdown.