Bitcoin plunges after brutal crackdown - NEWS.com.au

The price of bitcoin has plunged sharply after a brutal crackdown by China.

China’s central bank on Friday said all financial transactions involving cryptocurrencies were illegal.

That sounded the death knell for the digital trade in China after a crackdown on the volatile currencies.

Bitcoin’s price fell by as much as 10 per cent to US$40,983 in just three hours. It has since stabilised – at 7am today it was priced at $43,070.24.

Ethereum plunged by 12 per cent to $2747.34. It has also since recovered slightly.

The total market capitalisation of cryptos dropped from US$2 trillion to US$1.8 trillion or about 10 per cent.

“Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said in an online statement Friday.

The central bank said offenders would be “investigated for criminal liability in accordance with the law.”

The notice bans all related financial activities involving cryptocurrencies, such as trading crypto, selling tokens, transactions involving virtual currency derivatives and “illegal fundraising”.

The central bank said that in recent years trading of bitcoin and other virtual currencies had become “widespread, disrupting economic and financial order, giving rise to money laundering, illegal fundraising, fraud, pyramid schemes and other illegal and criminal activities.”

This was “seriously endangering the safety of people’s assets,” the central bank said.

While crypto creation and trading have been illegal in...



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