The price of bitcoin plunged in trading Wednesday following an announcement from China’s three largest exchanges that they would extend their ban on withdrawals on the cryptocurrency indefinitely.
BTC China, Huobi and OKCoin made the announcement in separate statements, saying that the suspension will lift only after regulators approve internal compliance upgrades, according to Bloomberg.
China’s central bank launched an investigation into bitcoin transactions in January with spot checks on exchanges to make sure the companies had correct licenses, had implemented anti-money laundering systems and to whether they were involved in any way with market manipulation. In response, Chinese exchanges introduced a fee of 0.2 percent on all buy and sell orders later that month to reduce the volume of automated trading.
That wasn’t enough to appease the Middle Kingdom’s governmentk with all three exchanges suspending bitcoin withdrawals in February following a request by the People’s Bank of China that they do more to prevent illegal transactions. Notably, the ban on withdrawals does not extend to those holding bitcoin who wish to sell their holdings in exchange for a cash payment.
Chinese bitcoin traders remain hopeful though that regulatory approval for the exchanges may be forthcoming. The director of the People’s Bank of China said Tuesday that regulators will adopt a “forgiving attitude” to local bitcoin exchanges in the future and that regulation may follow.
Following the news, the price of bitcoin has dropped nearly $150 from an all-time high of $1,293.30 to $1,147.84. The price drop has ended a monthlong rally that saw the price of the bitcoin rise approximately 30 percent. That resulted in global headlines given that for the first time 1 bitcoin was now worth more than the price of an ounce of gold.