Chinese Bitcoin Exchanges Need To Impose Stronger KYC And Stop Faking Order Volume

More details are coming to light regarding the PBOC’s press release related to Bitcoin. After the initial announcement sent shockwaves throughout the cryptocurrency community, it appears the bank has Bitcoiners’ best interest at heart. The institution forbids exchanges to do offline promotion, wants them to halt their fake order volumes, and not mentioned the Yuan devaluation. Plus, stronger KYC must be enforced. All things considered, none of these decisions will end Bitcoin any time soon.

PBOC Does Not Want To End Bitcoin At All

Social media has been buzzing about the PBOC press release, with various people explaining what this would mean for Bitcoin. As it turns out, things are far from gloomy, although there will be some changes to how exchanges operate in China. None of these guidelines will force any of these companies to shut down, and there is no curbing of Bitcoin trades in the country by any means.

What will change, however, is the way these Chinese Bitcoin exchanges conduct offline marketing. As of yesterday, it is no longer allowed for these platforms to partake in offline promotion, which is a rather strange decision. That means there will be no billboards, posters, or business cards related to BTCC, OKCoin, Huobi, and other platforms from now on. Whether or not this will have a big impact on Bitcoin in China, remains to be seen.

Secondly, the fake trade volumes have to stop. For the longest time, Bitcoin traders have speculated Chinese exchanges are padding the exchange volume numbers with fake trades all day long. Albeit these claims have never been officially confirmed, it seems the PBOC has reason to believe this is the case. Without fake order volume on the books, things should go back to normal for Bitcoin relatively soon. For now, Bitcoin is still trading well below the 6000 CNY – or US$865 – mark, though.

What is rather intriguing about the PBOC announcement is how the bank will prohibit Bitcoin exchanges from talking about the Yuan devaluation. The downfall of the Chinese currency has been a favorite marketing tool for anyone in the Bitcoin world and was not just limited to exchange platforms. Considering how the entire world is focusing on what the Yuan does, this decision should not affect the popularity of local Bitcoin exchanges at all.

Perhaps the biggest change is how the Chinese exchanges will need to conduct mandatory strong KYC from now on. As Bobby Lee mentioned yesterday, BTCC has been conducting thorough identity verification for several years now. It seems logical all other exchanges do as well. Although it is somewhat of a pain for customers looking to trade Bitcoin, it is the mandatory price to pay for using centralized exchanges in China.

Once these guidelines were announced, some financial experts predicted bitcoin trading would grind to a halt. Thankfully, that has not been the case, and the daily volumes have not changed all that much either. It will be interesting to keep an eye on these charts over the coming weeks and see if any major changes occur.

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