China’s bitcoin exchanges are allowing withdrawals again

bitcoin exchanges
REUTERS/Lucy Nicholson/File Photo

SHANGHAI (Reuters) – Major Chinese bitcoin exchanges have started to resume allowing withdrawals of the cryptocurrency after nearly a four-month freeze that followed increased scrutiny from the central bank.

Bobby Lee, chief executive of BTCChina, said in a statement on Thursday that his exchange had started “testing” withdrawals after upgrading its “know your customer” and anti-money laundering systems.

Huobi, another exchange, said in a statement it would resume withdrawals on Thursday.

Two industry sources said OkCoin, China’s third major cryptocurrency exchange, had resumed allowing withdrawals. A spokeswoman for OkCoin declined to comment but referred Reuters to an industry news outlet that reported on the resumption.

As the popularity of bitcoin spread, China quickly evolved into the world’s leading venue for bitcoin trading. But volumes collapsed after the People’s Bank of China began looking into the market more closely and conducting checks of the exchanges at the start of this year.

Major exchanges halted withdrawals of bitcoins in early February, introduced trading fees and stepped up scrutiny of clients amid discussions with authorities.

While withdrawals were suspended, investors could buy and sell bitcoins on Chinese exchanges but were barred from transferring them or downloading and removing them.

One of the industry sources said the decision to resume withdrawals was made after the central bank had signalled that it was not forbidden. BTCChina and OkCoin were allowing customers to withdraw a maximum of 10 bitcoins a day, the source said.

It remained unclear when more formal regulation of the industry would begin, the person added.

The decision to resume withdrawals comes with the price of bitcoin near an all-time high. Prices on European exchange Bitstamp were around $2,400 on Thursday – up nearly 150 percent from the start of the year.

The intensified regulator interest in bitcoin coincided with a clampdown on capital outflows, as authorities sought to relieve downward pressure on the yuan currency and stop the depletion of China’s foreign exchange reserves.

Bitcoin’s relative anonymity prompted some industry observers to say it had become an attractive, if niche, option for tech-savvy Chinese to hedge against the yuan and skirt rules limiting how much foreign exchange individuals could buy each year.

The yuan has stymied forecasts it would continue to fall after losing about 6.5 percent against the dollar last year. It is up more than 2 percent since the start of the year.

(Reporting by John Ruwitch and Brenda Goh; Additional reporting by Alexandra Harney; Editing by Muralikumar Anantharaman and Christopher Cushing)

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