China’s central bank today declared cryptocurrency-related activities illegal, sending the prices of virtual currencies such as bitcoin dropping.

The People’s Bank of China said that services offering trading, order matching, token issuance and derivatives for cryptocurrencies are prohibited. Cryptocurrency services offered by foreign exchanges are illegal as well.

The People’s Bank of China stated that “virtual currency-related business activities are illegal financial activities,” the BBC reported today. According to the Wall Street Journal, the central bank’s statement also vowed to investigate employees of foreign cryptocurrency exchanges in China and others who continue to advertise or provide crypto-related services. Furthermore, the statement said that companies shouldn’t be allowed to use terms such as “virtual currencies” or “crypto assets” in the names and descriptions of their businesses.

“Financial institutions and nonbank payment institutions cannot offer services to activities and operations related to virtual currencies,” the central bank added, reiterating an earlier statement.

The news caused the price of bitcoin, the largest cryptocurrency by market capitalization, to decline more than 8% to below $41,000 at one point today. Bitcoin has since recovered some of its losses. Ether, the second-largest cryptocurrency, dropped more than 7%.

Some companies have seen their share prices fall as well. Leading U.S. cryptocurrency exchange Coinbase Inc. is down more than 1% in trading today. Enterprise software provider MicroStrategy Inc., which owned about $3 billion worth of cryptocurrency as of earlier this year, saw its stock decline more than 3%. 

China’s designation of cryptocurrency-related activities as illegal follows several earlier measures targeting cryptocurrencies. In 2013, China barred financial companies from handling bitcoin transactions. In 2017, the country’s central bank announced a ban on digital token fundraisers known as initial coin offerings. More recently, this June, the Financial Times reported that several Chinese provinces have launched a clampdown on cryptocurrency mining.

Despite today’s dip in the prices of bitcoin and other virtual currencies, some cryptocurrency experts believe that the market will rebound. “Bitcoin and other crypto prices will react and recover, again showing their resilience and relevance in the world today,” said Chris Kline, the co-founder and chief operating officer at Bitcoin IRA, which provides a platform that enables users to buy cryptocurrency for their retirement accounts.

Analysts and industry executives who spoke to CNBC echoed that view, pointing out how cryptocurrency sell-offs were followed by price recoveries multiple times in the past. 

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