Crypto Restrictions Tightened in China

The Financial Supervisory Service has crafted a rewards-and-penalties system to persuade cryptocurrency investors to provide identification information prior to conducting transactions

The Financial Supervisory Service has crafted a rewards-and-penalties system to persuade cryptocurrency investors to provide identification information prior to conducting transactions

The move would effectively halt any Chinese citizens from being able to easily or legally participate in cryptocurrency trading.

The popularly of cryptocurrencies in South Korea helped drive the popularly of Bitcoin in the past months. Since then, bitcoin has mostly traded between a range of about $13,000 to $15,000. And on Tuesday, Bitcoin hit a four-week low amid worries that the country would actually go through with its planned crackdown.

Bitcoin's plunge on Tuesday brought the value of the cryptocurrency down by more than 40 percent over the past month. No. 2 virtual currency Ethereum was down 21%, Ripple slumped 27% and bitcoin cash shed 21%, with Neo showing the smallest fall among the top 10, losing 8%. The cryptocurrency's market capitalization now stands at around $198 billion, according to Reuters.

Some of the reasons for the cryptocurrency "bloodbath" are known to many crypto players.

South Korea had announced a curb on crypto futures and vowed the come down hard on any criminal activities involving illegal currencies.

The app allows users to store, transfer and exchange five major cryptocurrencies, including Bitcoin and Ethereum, and will be available on Apple and Android in a matter of weeks.

A senior official at the People's Bank of China recently called on a wider ban on services related to cryptocurrency trading in the country, reports Reuters. "It seems they're getting wise and waiting for the market to even out before buying in again.The reports are certainly not helping but in my assessment, the Asian market is simply exhausted of paying the premium". China is also reportedly driving out Bitcoin miners, a group estimated to produce two-thirds of the world's Bitcoin supply.

When the price of bitcoin fell in mid January a year ago, the cryptocurrency's price recovered to record levels.

The sell-off follows reports that South Korean finance minister Kim Dong-yeon said banning trading in virtual currencies was "a live option". In addition, the issue with taxes and the decentralization that blockchain offers may also be heating the tension and the fall in cryptos this week. Bitcoin's price at around $12,000 is generally attractive to investors, yet we can not help but recall billionaire Mike Novogratz, who sold his Bitcoins in late 2017, commenting on the excessive volatility of the currency.

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