What Happened: Bitcoin BTC/USD went into freefall once again as fresh information about China’s crackdown on cryptocurrencies emerged.
According to Chinese news outlet 8BTCnews, the Financial Stability and Development Commission of China State Council planning on cracking down on Bitcoin mining and trading.
Earlier today, at the Commission’s fifty-first meeting, the regulator called for resolutely preventing and controlling financial risks.
“It mentioned strengthening the supervision of financial activities of enterprises platform, cracking down on Bitcoin mining and trading,” reported 8BTCnews.
Bitcoin, which was trading over $41,000, fell to $37,000 soon after the news, followed by Ethereum ETH/USD, which dropped 12% in value, falling to $2,480 at press time.
Why It Matters: News of China’s crackdown on cryptocurrency trading and mining firms came shortly after Hong Kong’s regulator, the Financial Services and the Treasury Bureau (FTSB), determined that it would be best to confine the services of cryptocurrency exchanges to professional investors, at least for the initial stage of the licensing regime.
According to Hong Kong law, an individual must have a portfolio of HK$8 million or $1.03 million to count as a professional investor.
If the legislation is passed, this move will likely lead to the loss of a significant amount of trading activity from one of the largest crypto trading hubs in the world.
The proposed regulation was met with criticism from the crypto community, who said the move was a “very weird step backwards,” and a scheme that allowed only the rich to get richer.
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