BTCC Leaves the Bitcoin Business Amid Chinese Government Crackdown

29 June 2021 | Updated: 29 June 2021

BTCC, the company behind one of the most prolific exchanges in Asia, has announced that it has ended its cryptocurrency-related operations. The company noted that it sold all its shares in the Singapore exchange ZG.com in May 2020. Most cryptocurrency exchanges quartered in China fled to other countries during the first crypto crackdown in 2017.

However, the government appears to be tightening its grip on the crypto industry to prevent losing the capital tied to the industry. The People’s Bank of China has set its eyes on over-the-counter (OTC) businesses and cryptocurrency-related accounts. According to local reports, P2P and OTC businesses of interest will have their accounts frozen. This inhibition will likely affect cryptocurrency brokers in the country.

That said, a branch of BTCC operating in Hong Kong has issued a statement noting that the crackdown would not affect them. The offshoot asserted that the restrictions in Mainland China would not distort its cash flow. The company stated that:

“BTCC [Hong Kong] is not impacted for now because BTCC doesn’t provide trading of cryptocurrencies, but derivatives of cryptocurrencies.”

BTCC Is Pivoting to Blockchain App Development

BTCC stated that its attention has now shifted to developing blockchain-based applications. The Chinese government wholly supports using blockchain and has made it one of its primary focuses in its fourth industrial revolution program.

While cryptocurrency exchanges are under pressure from the Chinese government, miners are having a worse time. Over the past few months, the government has shut down several mining facilities and has issued mining bans in most of its largest provinces. This clampdown has affected the global mining work rate, as miners seek shelters in more hospitable regions.

Some provinces that have issued warnings or have banned mining activities altogether include Inner Mongolia, Sichuan, and Yunan.

Consequently, the inhibitive actions against the crypto mining industry have had a debilitating effect on the Bitcoin network. BTC hashrate has remained inconsistent for some weeks now. At press time, Bitcoin’s hashrate is at 67.9 EH/s after dropping by over 28% over the past 24 hours. The Bitcoin hashrate is down by about 65% from its all-time high of 191 EH/s in May.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.