On Thursday, Chinese bitcoin exchange BTC China announced that they will halt all trading from September 30. This decision was based on Chinese authorities’ concern over investment risks involved in cryptocurrencies and ordered a ban on initial coin offerings (ICOs), which is the practice of creating and selling digital currencies or tokens to investors to finance start up projects.
In recent years, China has soared as a cryptocurrency location as investors and speculators moved towards domestic exchanges that allowed users to conduct free trading which increased demand. However, Chinese regulators wanted to crack down on the cryptocurrency sector aiming to end potential financial risks as consumers are lead to a very risky market that has reported exceptional growth this year.
This ban with warnings by regulators in other countries has lead to almost $60 billion erased off the total value of cryptocurrencies since record highs reported at the start of the month. Bitcoin price dropped on BTCChina down 18% on the exchange at 20,510 yuan. U.S. exchange Bitstamp recorded a drop of 10% to a 5 week low of $3,426.92 marking it a record high of almost $5,000 in the beginning of the month.