Author: Michael Gu

The Chinese Exchange ViaBTC partly responsible for Bitcoin Cash, has issued an announcement today that they will close their website by the 30th of September. This is the second exchange to do this, as BTCChina has also announced that they will stop all trading by the 30th as well. The reason for the shutdown is due to the ICO regulations put forth on the 4th of September, and no new legislation has been quoted on the shutdown notice.

On September 4th, China’s central bank together with six other departments released a public statement  on regulation policies and warning the risks of ICO projects. As a responsible cryptocurrency exchange platform, ViaBTC (www.viabtc.com) has made a serious decision to carry out the spirits of the policy – we will officially close the website www.viabtc.com for exchange business in Mainland China on September 30th. Before that we will complete processing of all withdrawal requests of CNY and cryptocurrency assets. ViaBTC mining pool (pool.viabtc.com) and cloud mining services will not be affected.

The arrangements are as follows:

Sept 25th: Closing of registration, asset deposits and all trading pairs

Sept 30th: Closing of website www.viabtc.com

Please make sure to withdraw all your assets including CNY and cryptocurrency before September 30th, after which ViaBTC website www.viabtc.com will be officially closed in Mainland China.

After a week of endless rumors from China, starting with the original announcement on Caixin calling the “end of exchanges in China“, the rumors have become a reality when it comes to BTCChina. BTCChina has announced today that they will stop all trading on BTCChina (The chinese version of BTCC) on the 30th of September.

The reason they gave for the was the Sept 4 announcement – the ICO ban. This means no additional announcements have been made from the government regarding closing exchanges. It might be that they are announcing the end of trading as a precaution, or they might be in contact with different government departments and cannot disclose the details. OKCoin and Huobi PR said they have not received notice from regulators and are operating normally

Cashing Out:

Immediately after the announcement, there was a flurry of trade activity on BTCC, with the price of Bitcoin falling to as low as $2600 USD. Currently prices on BTCC are around $450 USD cheaper than the international price.

Other Exchanges:

Binance: Service for international exchange not affected. Chinese not allowed to trade since sept 6th

Yunbi: Rumored to shut down in 3 months

After reporting the demise of cryptocurrency exchanges in China, Chinese financial paper CaiXin followed up a rumor that exchange YunBi will close within 3 months. Journalists from CaiXin interviewed Xiaolai Li (李笑来) who indicated that YunBi will Progressively shut down in 3 months (There are no other official sources to back this up, other than the Caixin Journalist). Xiaolai Li is known to be a major investor in YunBi and is known to have investments in the ICO platform, ICOINFO. It is important to note that YunBi is the only large exchange talking about a potential shut-down, other exchanges such as BTCC, Huobi, OKCoin, Btc38 and Viabtc have all come out to say they haven’t received any notices from the government.

BTC is trading for lower on Yunbi

A look at Coinmarketcap shows that BTC is trading at a lower price than competitors such as OKcoin. Currently Yunbi is trading at $3950 USD per bitcoin whilst OKcoin is trading at $4102. This might be sign that OKcoin users are more concerned and choosing to sell their Bitcoin. It is important to note that the current trade volume for Yunbi is only at 1. (https://northeastohiogastro.com) 2 Million USD, which is ranked #141 in terms of trade volume.

ICO connection?

It is possible that YunBi is under additional scrutiny because of its ties ICO trading. They previously unlisted coins such as QTUM, GXS, EOS, ANS, DGD, 1ST, GNT, REP, SNT, OMG, PAY, LUN, VEN. Their investor Xiaolai Li is also connected to ICOINFO, so this might make them a larger target for potential government control. The government explicitly wanted to break up the connection between ICO platforms and Exchanges, hence separating the streamlined ICO listing process.

Additional sources:

8BTC: Li Xiaolai: Yunbi Is Winding Down In 3 Months 

8BTC: “It Will Take Two or Three Years Before all Exchanges Are Shut Down in China”

韭菜日报:李笑来称云币网将在三月内逐步关闭；聚币网普通交易区或将全部暂停；3ICO 将于12日关站，请投资者尽快提现

A new article appeared on Chinese news media outlet caixin, claiming that Chinese authorities are looking to close cryptocurrency exchanges due to risks of money laundering. Caixin.com posted an article titled “虚拟货币交易所时代结束” (the age of crypto exchanges is over) and sparked off a massive sell-off that caused Bitcoin and ethereum prices to drop 5-10%. Whilst it was previously discussed that rumors are sometimes the precursor to legislation, this should be taken with a grain of salt. Due diligence needs to be done as to where the rumors come from (eg. state run media or just regular media). In this case, this rumor was posted on regular media with very little sources of information (no new quotes from government officials etc).

Here is how Twitter responded to this situation:

What we know so far:

• Article was posted at 9:56PM, an unlikely time for real government announcements
• Similar news was posted on Tencent news, perhaps interpreting same article?
• BTCC, okcoin and Huobi have reported no notices or changes from the government
• Article did not state any additional sources

Other media interpretations

Quartz : https://qz.com/1073049/the-ethereum-eth-price-and-bitcoin-btc-prices-are-crashing-on-a-china-trading-ban/?unique_ID=636405021008563934
8BTC: http://news.8btc.com/game-over-bitcoin-exchanges

The FUD over the China ICO ban seems to be over. After causing a global panic on Monday with the announcement of an ICO ban, a Chinese official has clarified the position saying that China will look to resume ICOs in the future after establishing licensing regulations. This was done via an interview on CCTV-13, a state run national television channel in China. When asked about whether the ban could stop innovation in the Blockchain Space, the official responded that this was not the intention of the ban and it was meant to protect investors. The explicitly said this was a “Stop” and not a “Forbidden” . The interview proceeded to mention Fintech and the benefits of it. One important take home is that talk about “regtech” – regulation technology, something that might be implemented in the future to allow ICOs that really need the money to be controlled and licensed.

Check a video recording of the CCTV-13 interview:

http://finance.chinanews.com/shipin/2017/09-06/news730639.shtml

Who was interviewed and it matters?

The interviewee, Hu Bing is from 中国社会科学院金融研究所 ( Institute of Finance and Banking, an academic research organization that’s only loosely affiliated with the State). This is important because he is not a major government official and the choice of the speaker is very strategic. Depending on how you interpret it, the speaker could represent the current line of thought for the government but also allow room to change their opinion if things go awry.

Discussion on Boxmining 

https://www.youtube.com/watch?v=RTcvO0bKCxY

After the announcement from the People’s Bank of China declaring ICOs to be illegal, there has been some uncertainty over the future of exchanges in China. There has been some confusion with regards to what will happen to ICO tokens and coins. (texasautotrim.com) There is also confusion as the what are the exact rules trading. This is a list of how exchanges are currently handling the situation:

YunBi

• Resumed Trading
• Delisted QTUM, GXS, EOS, ANS, DGD, 1ST, GNT, REP, SNT, OMG, PAY, LUN, VEN
• Resuming BTC, ETH, ZEC, SC, BCC, ETC, BTS.
• Froze Trade APIs

Binance

• Disabled ICO platform
• Disabled Chinese IPs from Trading! 
• Refunded Tron Token
• Recieved VC funding –  Binance received financial backing from Black hole Capital and Funcity Capital
• Reassured that Exchange will be fine (10am on Slack)

JuBi

• RMB exchange
• Disabled “experimental” section, removing
• UGT , TIC , IPC , ELC , ICO , QTUM, HCC , BTM , ACT , BTK , EOS Removed

Hong Kong’s Securities and Futures commission has issued a new statement regarding ICOs and it’s classification in Hong Kong. The stated that depending on circumstances, some ICOs may be regarded as securities and could fall under securities regulation.

Where the digital tokens involved in an ICO fall under the definition of “securities”, dealing in or advising on such digital tokens, or managing or marketing a fund investing in them, may constitute a regulated activity. Parties engaging in a regulated activity targeting the Hong Kong public are required to be licensed by or registered with the SFC, irrespective of where they are located.

The take home here is that if a Hong Kong hosted ICO has securities like attributes it may be classified as a security and must be licensed by the SFC.

One country two systems

Hong Kong is part of China but has a different legal system under the “one country two systems policy”. This means Hong Kong has its own legislative council and will enforce laws differently from Mainland China. Currently, this policy is geared more toward regulation rather than outlawing ICOs like what is happening in Mainland China.

After the recent announcement from the Peoples Bank of China (PBoC) Banning ICOs, ICOINFO has swiftly refunding 4 ICOs that were previously listed on their website. A notice came up on their website at 10pm on September 4th, merely 7 hours after the announcement from the PBoC, stating that LLToken, UIP, CCC and HMS have been successfully refunded to contributor’s accounts. The refund strategy for Atmatrix will be decided by the 8th.

Rapid Refunds

Users will be able to withdraw their funds by 10:00 on the 5th of September. This news comes quite surprising as this date is less than 24 hours from the government announcement. This means they would have had to contact the project leaders, organized the refund and actually implemented the code to do it within 24 hours. It is evident that this is not only a huge operation (refunding thousands of dollars worth of coins) but also a very urgent one.

What about LLToken on Binance?

LLToken’s ICO was held on multiple ICO platforms, including Binance. In fact, the LLToken has already begun trading on Binance on the 30th of August. Since they are different platforms with different owners, the exact course of action for tokens issued on Binance is still unclear. The price of LLToken (LLT) has definitely taken a huge hit.

About ICOINFO

ICOINFO is a popular ico platform which has completed projects such as PressONE, which had Xiaolai Li as an advisor.

This article was originally posted on http://109.199.119.140/~boxminin/boxminingmedeveloper.temp927.kinsta.cloud/icoinfo-refunds-icos

China has officially banned all ICO (Initial Coin Offerings) in a recent article by the People’s Bank of China. This didn’t come as a surprise as the government has already leaked some warnings and rumors have been spreading regarding this issue. However, this was the worst possible outcome as some Chinese platforms were still optimistic that there would only be limitations instead of a direct ban. ICO platforms like ICOage and ICOINFO have already suspended operations prior to this announcement. In addition, the notice warned people about the dangers of investing in cryptocurrencies and stated directly that cryptocurrencies are not legal currencies in China. Cryptocurrencies are regarded as commodities in China and cannot be used in place of the government currency, the Ren Min Bi (RMB).

Too Fast too Furious?

ICOs in China has gained a lot of traction in recent months due to the rising interest in blockchain technology and the potential to make large gains from sold-out ICOs. This has lead to more than 300 ICOs going online in China, a lot of which was hastily put together. Some suspicion also fell on a few ICOs where leaders were accused of insider trading or faking the contribution amount. The government intervention in this field is most likely a response to the possible rise in the number of illegitimate ICOs.

ICO Refund ?

Cause 2 of the article asked for “individuals who have completed the financing of the tokens should make arrangements for repatriation and so on“. Currently, platforms such as ICOinfo are contacting project owners of ICOs that have NOT yet distributed tokens for a refund. It is unknown what will happen to projects that have already been sold on the market. Although it would make little sense refund tokens that are worth more than the initial ICO value.

HMS cancel ICO and refunds

The Global Health mutual Society Based on Blockchain (which is a real mouthful) has decided to refund the ICO and return coins raised to participants. The following message is left on the website:

[Note analysis of this event is still ongoing and updates will be added to this post]

ICOage, a popular chinese ICO platform that hosted projects such as Delphy and Indorse has suspended its operations today. ICOage is backed by famous cryptocurrency investor Li XiaoLai. XiaoLai also has ties to OKex and other cryptocurrency exchanges. All upcoming ICOs has been temporarily suspended, and this following notice was placed on their website:

China’s cryptocurrency Exchange Ban

The closure of ICOage is seen as part of a wide scale operation to ban cryptocurrency exchanges in china.

This suspension is voluntary and doesn’t affect the ICOs that have already been completed – the will continue as normal and contributors will be able to collect their tokens. However, upcoming ICOs have all been removed and they are no longer accepting any ICO applications. This is the second ICO platform to suspend its operations, the first being ICOINFO. Currently, it is unknown the duration of this suspension. (yourolddog.com)