Banking problems prompt Chinese bitcoin exchange OKCoin to suspend wire transfers

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Leading Chinese bitcoin exchange OKCoin has suspended incoming U.S. dollar wire transfers, sending a shudder through the cryptocurrency community days after Hong Kong-based bitcoin exchange Bitfinex (BTXNA Inc.) suspended all wire transfers.

In an email to customers, the exchange said the move to suspend U.S. dollar wire transfers was temporary because of issues with “intermediary banks,” adding: “Please do not make further deposit [sic] because your wires may be rejected by intermediary banks. We are actively looking for alternatives to resume deposit [sic] as soon as possible. Your current account balance remains unaffected. We are sorry for any inconvenience caused.”

The problem, like Bitfinex’s, would appear once again to be related to banking issues. However, OKCoin did not specify any particular bank it was having issues with. Bitfinex’s problems arose from Wells Fargo’s refusal to accept wire transfers from banks acting on its behalf in Taiwan.

According to Coindesk, the company said that it doesn’t currently have a “timeline for reactivation,” but it was working to restore deposit functions through alternative channels.

OKCoin and fellow bitcoin exchanges BTC China and Huobi have struggled of late following an investigation by Chinese authorities into whether the firms complied with local laws on registration and money laundering launched in January. All three exchanges suspended bitcoin withdrawals indefinitely in March. Although there is no suggestion at this stage that OKCoin may be in trouble financially, unlike Bitfinex, its banking problems are not a good sign for the company at a time when it is under government scrutiny.

Despite the scare and an initial small price drop, bitcoin rebounded to $1,230.73 at the time of writing, still at record high levels.

Photo: jonrussell/Flickr