BTCC Denies Reports of Illegalities, Ends Margin Trading

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In remarks to Reuters, BTCC Chief Executive Bobby Lee has claimed that recent Chinese media reports were wrong when they suggested that the country’s central bank had determined that the exchange was “engaged in illegal operations and financing activities.” That report from the China News Service relied on reporting from the state-run Beijing Youth Daily, which also claimed that two of the other large Chinese exchanges – OKCoin and Huobi – were also found to be engaged in similar illegal activities.

The Beijing Youth Daily story reported that the recent investigation of the country’s Bitcoin exchanges by the People’s Bank of China (PBOC) determined that BTCC, OKCoin, and Huobi were all engaged in “illegal” margin trading - which the Daily blamed for creating volatility in the market. There appears to be some debate about whether the use of margin trading constitutes an actual violation of Chinese law, however.

Lee noted, "No one has said that margin trading for bitcoin is illegal." He did, however, acknowledge that his exchange has ended margin loans, and that it did so after its talks with the PBOC. Lee claimed that media suggestions about illegal activities were not backed up by any official document. He also indicated to Reuters that the PBOC had not yet handed down any official decision to the exchange:

“So as far as I'm concerned, at this moment, we have not received any official documentation, verbal or written feedback from the PBOC with regards to their conversations with us over the last two weeks."

Reuters confirmed that OKCoin and Huobi have also suspended margin loans. Neither exchange apparently responded to questions about whether they had been provided with any official directives from the central bank.

The views expressed by the authors on this site do not necessarily represent the views of DCEBrief or the management team.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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