The Bitcoin situation in China has taken yet another drastic turn. After initial reports had revealed the PBOC has taken a keen interest in the BTCC exchange, it now turns out the company disabled lending of both fiat and Bitcoin. It is unclear why this decision was made, and if the service will ever come back. Existing loans are not affected, yet those who have completed their agreement are unable to borrow again.
The End of Lending At BTCC, For Now
News about Bitcoin exchange BTCC halting all financial lending options has taken the cryptocurrency world by surprise. There has been no indication of the company no longer offering this service until it was discovered by a user. A rather unusual development, although BTCC is not the first Chinese exchange to take its lending scheme offline as of late.
As we reported earlier, Huobi has recently disabled their Bitcoin lending practices as well. The company resumed that service only yesterday, and it is possible BTCC will go through the same process. For now, there is a lot of uncertainty surrounding this decision, and company representatives will not divulge any further details for the time being. That is only to be expected, and more information will be made available as soon as possible.
BTCC company representatives confirmed the lending features have been disabled, although they were unable to confirm if this service will ever come back. According to one representative, the decision is the direct result of a “recent business restructure.” This seems to indicate the discussions between BTCC and the PBOC brought something to light that could raise legal concerns, and halting the lending future was the best course of action.
Unfortunately, this decision means BTCC is no longer a suitable platform to short Bitcoin. Depending on what type of trading activity one is engaged in, this is either good or bad news. Other Chinese platforms offering a similar feature may be forced to disable or limit the feature in the future, albeit that has not been confirmed for the time being. It is also possible lending at BTCC will return with similar limits as the ones imposed by Huobi right now.
Margin trading is a type of financial activity that does not fall within the traditional scope of financial licensing in the Bitcoin world. Exchanges who are fully licensed may be operating their margin trading illegally, and the PBOC is investigating the matters in China right now. It is unclear what this will mean for future Bitcoin margin trading in the country, though. For now, speculation is running wild, although this news does not seem to be affecting the Bitcoin price in a major way.
There is also some speculation on Reddit related to how a lot of Bitcoin trader son exchanges are unaware of how they issue loans to other users. That is rather troublesome, to say the least. Do keep in mind this is only speculation for now, and nothing has been officially confirmed. It would be rather odd to see Bitcoin companies use these hidden loans to manipulate the Bitcoin price, although it is not entirely impossible either.
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