China bitcoin exchanges to halt leveraged transactions

May 07, 2014 12:57
Bitcoin exchanges in China are taking steps to curb speculative trading in the virtual currency. Photo: Bloomberg

Five major Chinese bitcoin exchanges issued a joint statement Tuesday, acknowledging the problems in the development of the virtual currency in the country and pledging to curb leveraged transactions in order to rein in speculators.

The exchanges have called for self-discipline among all industry players to address the problems in the market that include volatile bitcoin prices and lack of risk awareness among investors. Meanwhile, they vowed to unify the transaction fees involved in trading the digital currency.  

The five exchanges are BTC China, OKCoin, Huobi, BtcTrade and CHBTC, with the first three accounting for 60-70 percent of transactions worldwide, the Hong Kong Economic Journal reported Wednesday.

OKCoin and Huobi have previously allowed bitcoin players to secure assets on their platforms to other players or trading platforms to borrow funds or bitcoins, the paper said, citing the online news portal of Caixin.

In the statement Tuesday, the exchanges said new leveraging transactions will be halted on May 10, and that such trading will cease totally when all outstanding amounts are cleared.

Bitcoin price has been hovering at 2,600 yuan (US$417.53) since the end of April. There had been talk that the Chinese central bank held a meeting with commercial banks and third-party payment agencies late last month to discuss measures to monitor the risks.

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Freelance journalist