A Chinese Bitcoin Startup Has Stopped Some Services Due to Central Bank Concerns

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January 12, 2017 6:40 pm | By Jit Sutradhar News

lion A long-running bitcoin investment platform is shifting gears in light of new regulatory scrutiny in China.

BTC123, established in 2011, announced today that it would halt deposits for a financial management system denominated in bitcoin and the yuan beginning on 26th January. The company is also retooling an interest-generating feature on the site, lowering rates that users can earn effective tomorrow.

In the blog post, the company cited regulatory requirements in China, naming the People’s Bank of China (the country’s central bank) and the Ministry of Public Security (China’s main policy authority), when explaining the changes.

Ricardo Zhang, CEO of BTC123, said that his company is retooling its strategy in light of the shifting regulatory environment. However, Zhang said the startup had not been contacted directly by the central bank.

Echoing other domestic bitcoin services, Zhang said that the site would adhere to any regulations required by the Chinese government.

He told CoinDesk:

“Our main business will be in accordance with the Chinese government[‘s] laws and regulations.”

BTC123’s shift comes after the company announced a new round of funding via the social media platform Weibo when, on 29th December, the site said it had raised 10 million yuan (roughly $1.5m at press time).

In addition to offering financial management and price data from major Chinese exchanges, BTC123 also offers news and information related to bitcoin and blockchain tech.

The development is the first sign that increased scrutiny by regulators in China may be having an effect on bitcoin-related services in the country.

Last week, word emerged that representatives from major Chinese bitcoin exchanges had met with officials from the PBoC. Subsequent reporting revealed that regulators in China were moving to monitor exchange activities more closely (though there is debate about the impact of the move).

Exchanges in China have since called for a balanced regulatory approach, while local traders have reported they are largely unconcerned by the developments.

Article Source: http://www.coindesk.com