Bitcoin operator BTC China has stopped accepting customer deposits, causing Bitcoin value to plunge 35% in just a day.
YeePay, the third party payment provider used by BTC China, the largest Bitcoin exchange in China gave notice it would no longer provide deposit services to the company.
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Another payment provider Tenpay has also halted business. China Business News reported yesterday that the central bank told third-party payment service providers to stop offering clearing services to online Bitcoin exchanges by 31 January.
Starting 18 December at CNY3,800 ($626) the price per unit fell to a low of CNY2,018. It has been a turbulent month for the online currency which soared to a high of CNY7,395 earlier in December.
Bobby Lee of BTC China has responded by insisting that customers with existing CNY balance would still be able to withdraw cash. "They are completely safe," he said, explaining that the emphasis of the notice was only on deposits.
This ruling is the latest blow to Bitcoin’s supporters who saw China’s booming market in commerce as a fertile market for the virtual currency.
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By GlobalDataChina’s clamp-down on Bitcoin started two weeks ago when they banned financial institutions from handling Bitcoin transactions.
The ban stated that Bitcoins, not supported by any central authority or country, were a "virtual good" with no legal status and deemed that they should not be used as currency.
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