BTC China Exchange Resumes Taking Deposits In Yuan
The largest Bitcoin exchange in the world says the memo banning virtual currency transactions was misunderstood
BTC China is once again exchanging Yuan into Bitcoins, after its lawyers decided that the ban on virtual currency transactions issued by the People’s Bank of China only applies to banks.
In December, Bitcoin had lost more than a third of its value in just a few hours, after China’s virtual exchanges stopped accepting new deposits in local currency.
“We are definitely in compliance with the December 5 memo, but the government and the government agencies can change the rules anytime in the future,” said Bobby Lee, the head of BTC China. “So we are going to take a wait-and-see approach.”
The news had little effect on the price of Bitcoin, which continues to trade around £570 on Mt. Gox, and now costs approximately ¥4,860 on BTC China.
And we’re back
On 5 December, the People’s Bank of China issued a memo in which it banned the country’s financial institutions from exchanging domestic currency into Bitcoin. Chinese regulators previously said they were concerned by the risks involved in trading BTC, and they couldn’t have been too happy about its anonymous nature either.
But BTC China, the country’s oldest virtual currency exchange which also became the world’s largest in the run-up to December, claims that the new rules have been misunderstood. For this reason, it has resumed taking deposits in Yuan, a day before the deadline set by the regulators.
Lee told the Wall Street Journal that after studying the Bank of China memo and related documents, the company came to the conclusion that the new rules apply to banks, but not currency exchanges. He believes it is completely safe to accept deposits into BTC China’s corporate account, and later transfer funds into its customers’ accounts.
Bitcoins, or BTC, make up a decentralised virtual cryptocurrency commonly used online among people interested in keeping their transactions secret. It is not tied to any real money, but traded on various electronic exchanges to establish its price.
The open-source, peer-to-peer Internet protocol that Bitcoin is based on was introduced in 2009 by an anonymous developer known only as ‘Satoshi Nakamoto’. Recently, a number of major online businesses have started accepting BTC as a form of payment, improving its reputation.
However, earlier this week, US authorities have charged Charlie Shrem, the vice chairman of the Bitcoin Foundation and co-founder of BitInstant, with operating an unlicensed money transmitting business, violating the Bank Secrecy Act and conspiring to commit money laundering through the now-defunct Silk Road marketplace.
The lawsuit shows that despite genuine interest from organisations like Bank of America and Wells Fargo, the future of Bitcoin remains unclear.
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