The price of bitcoin crashed today after the bitcoin exchanges OKCoin and Huobi each announced that they were temporarily pausing withdrawals. The reason given for the pause is to allow time to upgrade systems in order to fully comply with “anti-money laundering, foreign exchange management and payment and settlement and other financial laws and regulations”. The pause is expected to last one month.
Chinese exchanges have been under increased scrutiny over the past few months as authorities have expressed concern about bitcoin being used for speculation, criminal activity, and as a means to avoid Chinese currency controls. Authorities have met privately with the largest exchanges and last month several no-fee exchanges began imposing trading fees in response to concerns. This recent news is just the latest and probably not the last measure that will be taken to appease Chinese authorities.