Bitcoin Exchange BTCC: China Has Not Declared Margin Trading Illegal

Bitcoin Exchange BTCC: China Has Not Declared Margin Trading Illegal

On Thursday the leader of BTCC also known as Chinese bitcoin exchange refused reports from media that the exchange company was giving margin loans ill

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On Thursday the leader of BTCC also known as Chinese bitcoin exchange refused reports from media that the exchange company was giving margin loans illegally based on the ruling made by the Central Bank. Also, he added that the platform is operating in the normal way.

Although Bobby Lee who is the chief executive informed Reuters that the company together with competitors like Huobi and Okcoin stopped giving margin loans after consulting with the People’s Bank of China (PBOC). He did not give details.

“It has not been said by anyone that margin trading by bitcoin is illegal,” Lee said. “The media reports are not found on any official documents and as far as I know presently, we have not been issued with official documentation including a written or verbal response from the PBOC in relation to the discussion we have had with them in the last two weeks.” Lee continued. On the other hand, the PBOC refused to give a statement on the same.

A newspaper run by the state called Beijing Youth Daily reported on Thursday that investigation done by the PBOC discovered that the three largest bitcoin exchange companies in China were running margin trading illegally and that activity caused unusual market volatility.

Another media also owned by the state called Economic Information Daily said that China’s Central Bank branch in Shanghai had discovered ‘hidden risks’ within BTCC.

Spot Checks

The central banks started spot checks on BTCC, Huobi, and Okcoin on Jan, 11 to examine a variety of possible violations in the middle of growing effort by the government to remove outflows of capital and lessen pressure laid on the Yuan currency.

Although the Yuan currency weakened 6.6 percent against the Dollar in the year that passed making it its worst performance since 1994, the price of bitcoin has ascended to near the record high figure.

After some Chinese media reports were published late on Wednesday the Bitcoin price dropped by about 8 percent on BTCC exchange to 5724 Yuan equaling almost $835. By Thursday the price had grown to almost 6120 Yuan.

Okcoin and Huobi spokeswomen told Reuters that their companies also had stopped giving margin loans but both of them did not answer questions about if they had been issued with official warnings from PBOC.

Lee of BTCC added that the exchange companies had talk about beginning to charge trading fees and they were ready but he said that the regulator may have to be involved before that happens.

Trading fees absence has motivated many and increased demand at the Chinese Bitcoin exchanges.

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