China’s first cryptocurrency exchange, BTCChina, pulled out of the Bitcoin business to protect itself from the ongoing crackdown on cryptocurrency mining. The company is currently exploring other blockchain applications and ultimately intends to shift its focus away from cryptocurrency.
BTCC founded by Huang Xiaoyu and Yang Linke in 2011. The company’s stake in the Singapore-listed ZG.com exchange sold to a foundation in Dubai just over a year ago. In 2018, BTCC was acquired by a Hong Kong-based investment fund. In the same year, the exchange closed its mining pool.
At the end of last week, the BTCC administration announced that the site completely refuses to conduct operations with Bitcoin. The company also clarified that with a change in focus in its core business, it will now place more emphasis on other blockchain application. Which is the fundamental principle governing cryptocurrency.
BTCC announced its decision amid increasing pressure from China on the cryptocurrency industry, including mining and trading. Thus, the close of the exchange did not come as a surprise.
While this is not the first time that exchanges have had to deal with cryptocurrency-related bans, recent government moves have raised concerns among the sector.
BTCChina — one of the oldest cryptocurrency exchanges in China
BTCChina, founded in 2011 in Shanghai. It is one of the leading digital asset trading platforms. Once it claimed to own roughly 80 percent of the world’s cryptocurrency trading.
The vast majority of Bitcoin users don’t remember before BTCC. All over the world, new exchanges opened, old ones crashed, some closed, taking possession of clients’ money. Others such as BTC-e accounts arrested, while BTCC remained afloat.
When Chinese regulators banned initial coin offerings (ICOs), a cryptocurrency-based fundraising process in September 2017, BTCChina said it would stop trading cryptocurrencies.
Crypto exchanges leave China
BTCChina’s decision to ditch its Bitcoin-based business structure is not taken for granted. China’s previous anti-cryptocurrency measures have forced many exchanges, including Huobi, Binance, and Okex, to relocate their businesses overseas. The latest crackdown is forcing many cryptocurrency mining companies to move their bases abroad to the United States, Canada and Kazakhstan.
The measures taken by the NBK are to tighten the rules for local dealers involved in foreign cryptocurrency transactions and ICOs. The authorities have also banned Chinese financial institutions from engaging in and funding cryptocurrency-related activities such as digital asset trading. For companies like BTCC, this is a fatal blow as their main business model was a cryptocurrency exchange.
Back in January 2018, Bobby Lee, CEO and co-founder of BTCC, said in an interview that the resilience of cryptocurrencies will allow them to bounce back by following more rules: “It’s only a matter of time before China lifts the cryptocurrency exchange ban”. However, as we can see, regulators are only tightening the rules.