China's first bitcoin brokerage closes after government crackdown

China's first bitcoin brokerage closes after government crackdown

China's first bitcoin broker (BTC) shuts down cryptocurrency activities in the face of increasing government repression

BTCChina, the first cryptocurrency broker to operate in China, has announced that it will end all its bitcoin (BTC) and other digital assets in the country in the face of growing repression in Beijing. In May, the Chinese government imposed new bans on digital currency services and transactions and more recently launched extensive operations against miners, closing dozens of facilities dedicated to the activity.

The company announced that it has "completely exited the bitcoin-related business" and that it has sold its stake in Singapore's ZG cryptocurrency exchange. BTCChina was the first broker to offer digital currency trading in the country in 2011, when the concept was still very new and foreign to the entire world.

At the time, the exchange founded by Huang Xiaoyu and Yang Linke had the mission to help spread bitcoin and its ideal to the Chinese, which later became a financial product given the volatility of prices and the prospect of appreciation. Before the start of bans on digital assets in China in 2017, the brokerage was responsible for 80% of all cryptocurrency trades in the world.

China strengthens crackdown on cryptocurrencies and mining

Beijing banned all digital currency trading in the country in 2017, prompting BTCChina to stop its primary activities and switch to investing in bitcoin exchanges abroad. At the time, large and important exchanges that were born in China migrated to Hong Kong and other countries, such as Binance.

In its latest statement, BTCChina said it was exiting the bitcoin market “in response to Chinese government policies” against cryptocurrencies and their mining. Beijing views digital assets as a risk to the country's financial stability and a competition for its central bank digital currency (CBDC), which is close to national implementation.

Other brokers have also been abandoning or restricting their business in China. Okcoin, another former Chinese exchange, announced its dissolution last week, indicating that it would be reformed and migrate to another country. Huobi, meanwhile, has updated its service and product offerings to protect itself from government repression, banning Chinese from trading any cryptoactive derivatives.