Following the inspections by the People’s Bank of China (PBOC) which started in January, Chinese bitcoin exchanges halted bitcoin withdrawals. Now that the inspections are near completion, regulators are reportedly preparing to issue regulatory guidelines for all bitcoin trading platforms in China. These documents are expected to be released in June and withdrawals could soon follow.
‘Notice of Administrative Punishment’
The on-site inspections of Chinese bitcoin exchanges are near completion, reports Caixin on Wednesday.
The regulators will soon issue a “Notice of Administrative Punishment” to each of China’s three largest bitcoin exchanges, according to a translation by Cnledger on Twitter.
“This type of notice is issued by government departments to those who did not break the laws but violated certain rules or regulations. In many cases, fines are incurred,” Cnledger explained. Okcoin, Huobi, and Btcc “will be facing a penalty of an unknown amount,” local Chinese publication 8Btc wrote.
Two Regulatory Documents Expected in June
Last month, Bitcoin.com reported on a leaked document of the Chinese government’s “rectification plan” for bitcoin exchanges.
8Btc reported on Wednesday that rectification requirements and inspection findings were used to compile two regulatory documents. The “management guidelines” and “AML guidelines” for bitcoin exchanges are expected to be released in June, the publication detailed, adding that:
According to the inspection findings, the relevant administrative penalty resolution has been drafted and the paper is being reviewed. Two key issues must be corrected: one is the fiat and BTC lending business and the second is the flawed AML system.
How the Ordeal Began
The on-site inspections of Chinese bitcoin exchanges began in January. The following month, major Chinese exchanges announced the suspension of bitcoin withdrawals for one month, only to extend it longer. The exchanges have claimed the withdrawal suspensions are necessary while they develop and upgrade their systems to comply with regulations. They have also suspended margin trading.
Following the inspections of major bitcoin exchanges, the PBOC started inspecting smaller ones. The bank also reportedly suggested extreme measures for all Chinese bitcoin exchanges to follow including in-person verification for account opening and other extensive customer verifications.
Meanwhile, the bank has put together a list of rules for bitcoin exchanges to follow. Withdrawal suspensions and other major changes were speculated as being orders from the PBOC; a theory which was confirmed in the leaked document in April.
When will Withdrawals Resume?
Suspension will lift only after regulators approve internal compliance upgrades.
As the AML document and regulatory guidelines for Chinese bitcoin exchanges are expected to be released in June, “bitcoin withdrawal suspension could be removed subsequently,” 8Btc noted.
Do you think withdrawals will resume in June? Let us know in the comments section below.
Images courtesy of Shutterstock and PBOC
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