7 Reasons for Closing Bitcoin Exchanges in China
October 14, 2017
In an interview with CCTV a professor at China’s Renmin University, Yang Dong, has offered his interpretation of why the regulators are shutting down Chinese bitcoin exchanges. He outlined seven key reasons.
- Lack of licensing. He said that financial institutions must receive licenses to carry out business, it is required by the China Banking Regulatory Commission and the China Insurance Regulatory Commission (CIRC).
- The nature of Bitcoin. According to the regulators’ words, the structure and characteristics of Bitcoin such as independence from driving inflation force, difference in exchange and instability make Bitcoin very dangerous.
- Laundering of money.
- Pyramid schemes.
- Market manipulation. Anyone investing high money will be able to easily control it. The professor explained that the victims of losses are the ordinary investors, that are not informed enough and have two strikes against one.
- Security concerns.
- Darknet transactions. The Professor’s final point was about Bitcoin being used in Darknet markets, which have not been effectively regulated.