Cryptocurrency exchange exodus off China as crackdown intensifies

• At least five exchanges have shut down China while others consider locking out China-based users.
• It is unknown how deep and far the current crackdown will go.
• Investors and traders are groped in fear with some starting to move digital assets from exchanges.   

China has acknowledged support for the blockchain technology. However, the country still shuns and discourages any sort of trading and speculation. According to a report by Bloomberg on November 27, at least five local exchange companies have shut down while others have communication the intention to lock out local users. The exodus follows numerous warnings originating from regulators in China.

The central in particular has caution investors against involvement in cryptocurrencies including trading. The regulator says that the risks associated with cryptocurrencies have far-reaching effects including total loss of funds.

Exchange operators like Bitsoda and Akdex closed down operations in China last week. Another exchange platform referred to as Biss paused its services earlier this month to allow its executives to collaborate with Chinese authorities in an ongoing probe. Another exchange likely to shut down is called Btuex due to orders from the government. However, Btuex is will plan a comeback that will allow it to serve overseas customers. At the same time, Idax exchange via an official communication on Sunday said that it was going to lock out all China-based customers.

Katie Talati, head of research at Arca, a Los Angeles-based asset manager that invests in cryptocurrencies explained:

“It appears that, like everything else within their borders, China feels it needs to have tighter controls on the crypto market including exchanges, miners and asset issuers.” She added “I do believe, however, they are moving in a similar direction as Japan and other jurisdictions that have tight and clear regulations for crypto businesses.”

Panic continues to grip Chinese investors as they are not sure how far or deep the crackdown will go. Some investors and traders have already started moving assets from exchanges to private wallets in a bid to have them secured.