Bitcoin Value Falls Drastically After China Declares Crypto-Currency Transactions Illegal

Bitcoin Value Falls Drastically After China Declares Crypto-Currency Transactions Illegal.

The value of Bitcoin has dramatically dropped after China’s central bank on Friday, September 24 announced that all transactions of crypto-currencies are illegal, effectively banning digital tokens such as Bitcoin and ethereum in the country.

China is one of the world’s largest crypto-currency markets and 95 percent of crypto mining occurs in China.

 

“Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said, warning it “seriously endangers the safety of people’s assets”.

Following the announcement, the price of Bitcoin fell by more than $2,000 (£1,460).

It is the latest in China’s national crackdown on what it sees as a way to launder money and a speculative investment.

Trading crypto-currency was officially banned in China since 2019, but has continued online through foreign exchanges.

In May, Chinese state intuitions warned buyers they would have no protection for continuing to trade Bitcoin and other currencies online, as government officials vowed to increase pressure on the industry.

Then in June, it told banks and payment platforms to stop facilitating transactions and issued bans on “mining” the currencies – the trade of using powerful computers to make new coins. In September 2019, China accounted for 75% of the world’s Bitcoin energy use. By April 2021, that had fallen to 46%.

 

The Friday statement makes clear that those who are involved in “illegal financial activities” are committing a crime and will be prosecuted.

The statement also added that foreign websites providing such services to Chinese citizens online is also an illegal activity.