A few weeks ago, all Chinese bitcoin exchanges announced they were forced to suspend bitcoin and altcoin withdrawals. This decision was made in lieu of the PBoC regulations regarding anti-money laundering practices. It now appears BitVC, a Hong Kong-registered bitcoin exchange, is going through a similar ordeal.
The news came as quite a surprise, considering BitVC is registered in Hong Kong. Up until this point, there was no indicating Hong Kong would force local cryptocurrency exchanges to suspend withdrawals for an undisclosed period of time. However, the company alerted all customers about this decision earlier this morning.
It appears the company is also affected by the PBOC‘s decision to crack down on AML practices. It is worth noting BitVC is an exchange operated by Huobi, which may explain why they fall under Chinese regulation. Moreover, it is possible BitVC has a principal place of business outside of Hong Kong, which would explain why the PBoC has so much sway over this company’s day-to-day operations.
What is rather disconcerting is how the message sent out to all BitVC users mentions how bitcoin and litecoin withdrawals are suspended “from now on”. Instead of giving users an idea as to how long the process will take, they seemingly hint at how the withdrawal service may never be resumed again. Then again, Chinese exchanges have not been given an official ETA as to when withdrawals will be resumed either.
While it is commendable the PBoC is taking anti-money laundering requirements so seriously, it goes to show a lot of Asian cryptocurrency exchanges are not prepared for it. Consumers can still exchange funds to local currencies if they need to do so, but they are effectively unable to withdraw their [recently]purchased cryptocurrency balances. It is possible this will create some minor volatility across the exchanges, but for now, there is no impact whatsoever.
That being said, it would be a bit less troublesome if these exchanges could give customers a heads up about what is to happen. Suspending withdrawals out of the blue is never a popular decision, yet that seems to be the preferred cause of action by Chinese and Hong Kong exchanges right now. Earlier this year, the company announced the addition of trading fees to their platform well in advance, yet when it came to suspending withdrawals, they remained tight-lipped.
It is evident the cryptocurrency landscape is changing drastically in Asia. With the PBoC cracking down on money laundering, virtually all cryptocurrency platforms have been forced to announce changes. Suspending margin trading and enabling trading fees were just the first steps. Actively preventing withdrawals is a very troublesome development, and we can only hope BitVC will be able to resume its services sooner rather than later.
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