China cracks down on illegal crypto exchanges, Bitcoin drops by $500

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The reports about a possible war against cryptocurrency exchanges in China have driven popular cryptocurrencies down. ICOs are now illegal in the country, and the regulator asked all those who raised the money this way to provide a refund to the investors.

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Within a week since the announcement of PBoC was released, state-owned financial news publication Caixin reported that PBoC has been planning to ban all of the local bitcoin exchanges and trading platforms. In response to the news, the Bitcoin prices have dipped to a low of $4,108, according to CoinDesk. But, in contrary, bitcoin has recovered to over $4,200 today, with the Chinese bitcoin exchange market demonstrating high trading volumes and USA investors moving bitcoin price upwards.

One of bitcoin's biggest influencers, Crypto Compare's Charles Hayter, said to CNBC recently that for China "nothing is ever certain" when it comes to cryptocurrencies.

More to that, within a single day, bitcoin price in the Chinese exchange market rose by 9.3 percent, while other markets such as the US, Japan and South Korea remained stagnant. They allow companies to issue "tokens", similar to shares.

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More to that, the Chinese bitcoin industry and market have regained trust over bitcoin and its legal status in China.

When China banned ICOs, Bitcoin price took its first dive in many months, from almost $4,900 - $5,000 to $4,500. The Chinese bitcoin exchanges have also confirmed that they have not received any such intimation from the authorities and this has helped the bitcoin prices to bounce again from the $4000 region for the second time in a week.

However, cryptocurrencies are not banned in China, only trades and ICOs. However, the Chinese market has shown that it does not necessarily perceive the suspension as a threat.

Chinese financial officials said a year ago they plan to crack down on cryptocurrencies because Bitcoin and other virtual currencies were often used to finance terrorist groups and launder money out of the country.