Follow-up: PBOC Shuts Down Exchanges and Miners (BTC, ETH, LTC)

This is going to be another informal follow up to the last PBOC exchange news I received. I asked my colleague to keep me in the loop if there were new developments regarding China and cryptocurrency regulations. Below is and email conversation we had this morning.

*****,

Since we last spoke the situation has escalated. We were told PBOC was going to shut down Chinese exchanges and miners. In that regard nothing has changed but what proceeded this has caught us off-guard. Last Thursday one of our American business associates who lives in Beijing received notice and was “asked” to remain in China. This associate is the main contact point at one of the mining operations we had interest in.

Below is an excerpt from the notice he sent us.

“All China based cryptocurrency exchanges, virtual miners and fundraisers are to cease operation. Businesses will relinquish all equipment to local authorities pending internal investigation. Company executives should report to their respective local authorities and cooperate with the investigation.

Volatility of cryptocurrency poses a serious risk to the Chinese people and needs regulation. Virtual tokens lack inherent value basis of a legitimate currency. Without adoption of a centralized government virtual currency will not stabilize. Without stability virtual currency can not be used as a means of commodity exchange.”

I’m not sure what their intentions are here but we are scrambling to find out.

Hi *****,

Sorry to hear about this and it sounds a little scary. I’m just going to get right to it and hit you with all my questions.

So who exactly sent the notice and asked your associate to remain in China?
What exactly are they investigating?
We’ve heard rumors September 30th is the shutdown date for exchanges what about miners?
You said you were exploring your options with the third mining operation last time we talked did you pull out of that?
Any chance China is faking another Bitcoin ban and this is all a bluff?

I’m not going to speculate about intentions right now but I’ll tell you what I know.

The notice was delivered by local authorities on behalf of PBOC. I don’t have specific details about the nature of the investigation but it’s not just targeting our associate. He was asked to detail how the mining operation was run and names of those involved. I’m not sure about the official shutdown date but it appears they have intentions of doing it fairly soon. We have pulled support from all mining operations we were involved with. Like I said last time we talked this time feels different. My stance hasn’t changed on that, they seem serious.

This is the second time I’ve heard top level personal of exchanges or mining operations have been asked to remain in China. I’m very curious as to what this investigation is about as I’m sure many of you are. I will report back here if there are any new developments.