Recent reports suggest that Chinese authorities have given verbal directives to domestic cryptocurrency exchanges to voluntarily shut down their services as they are operating without a formal license.

According to the leaked documents on Chinese social media, the authorities have outlined the steps that these exchanges must follow during the shutdown process. The translated version on CoinDesk says:

“1. Before 20 September 6pm, exchanges shall come up with a detailed risk-free clearing plan, and send this plan to the office. Exchanges shall deal with their claims and liabilities properly, and insure that investors’ funds and virtual currencies are safe.

2. Before 20 September 6pm, exchanges shall determine a bank account, which will be used for depositing user funds. All other accounts in banks and other non-bank payment service providers shall be canceled and reported to the Business Management Department of People’s Bank of China.

3. Before 15 September midnight, exchanges shall publish closing announcements, and announce a schedule to stop the trading of all virtual currencies. New user registration shall be stopped immediately after the announcement.

4. Shareholders, controllers, executives, and core financial and technical staff of exchanges shall cooperate fully with authorities during the clearing, while staying in Beijing.

5. Exchanges shall report their developments daily to local authorities before the clearing is completed.

6. Exchanges shall save all user trading and holding data, and send it to local authorities immediately in DVDs.

The document is signed: The office of the Leading Group of Beijing Internet Financial Risks Remediation, Sept. 15, 2017”

Official statements from Chinese cryptocurrency exchanges

A number of Chinese cryptocurrency exchanges have started issuing statements on how they plan to pull the plug on their operations. They, however, are citing the People’s Bank of China’s notice on Initial Coin Offerings (ICOs), issued earlier this month, as the reason behind this decision.

BTCChina has already announced via Twitter that it will stop all trading on BTCChina Exchange, effective September 30, 2017. In a series of tweets, the exchange urged customers to withdraw their funds as soon as possible.

ViaBTC has announced that it will officially close the website www.viabtc.com for exchange business in Mainland China on September 30th. It said, “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.”

Yunbi announced the permanent closure of its trading operations in a statement. It said (Google translated): “Cloud network will be in Beijing on September 20, 2017 00:00 permanent closure of all varieties of trading functions.”

Local media outlet Caixin reported that cryptocurrency exchanges OKCoin and Huobi have been given 1 month buffer period, meaning that they will shut down their operations by the end of October. CoinDesk reported that the exchanges will stop yuan-denominated trading, but will continue to offer cryptocurrency-to-cryptocurrency trading services.

OKCoin and Huobi said that they will stop virtual currency trading business, adding (Google translated) “because regulators have not announced that the bit[coin] and digital assets itself is illegal, OKCoin currency will actively explore, strive for, expect to continue to provide Chinese users with compliance digital asset services.”

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