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China imposed a fresh ban on the cryptocurrency sector making the price of bitcoin fall below $34,000. The price of bitcoin has fallen this low for the first time in three months. Financial regulators in China have banned payment companies from providing crypto-related transaction services and have given investors a warning against risky crypto trading.
The currency faced a major fall when Tesla announced that it no longer supports Bitcoin. While other digital currencies like Ether and Dogecoin have also lost 22% and 24% respectively. Elon Musk’s firm still holds $1.5 billion worth of digital currency.
China has put a ban on cryptocurrency trading for a few years now in order to fight financial crimes like money laundering and terrorism financing. However, what concerned the regulators in Beijing and moved them to implement the recent is that people were still able to take part in Bitcoin trading online.
Bitcoin falls further as China cracks down on crypto currencies https://t.co/sa9rUtcWTX
— BBC News (World) (@BBCWorld) May 19, 2021
The three regulatory organisations backed by the state including the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China released a warning on social media. They claimed that the consumers will not have any safety net if they face any losses through cryptocurrency transactions and cryptocurrency investments.
“Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” the bodies said in a joint statement
The association of trade warned the traders to be more vigilant of the risks attached to the cryptocurrency investments and the growing number of scams in the sector. Association also asked the members of the crypto industry to strictly comply with regulatory measures in the crypto sector.
Experts say that “China has for some time been putting pressure on the crypto space, but this marks an intensification – other countries might follow now as central banks make strides towards their own digital currencies. Until now, Western regulators have been pretty relaxed about Bitcoin, but this might change soon.”
Many financial regulators from around the world have been hesitant towards accepting cryptocurrencies as it sparks the rise in financial crimes and illicit financial flow. Countries like Nigeria, China, the UK, Turkey, etc have also imposed sanctions on the crypto sector this year.