Statements by China’s State Council regarding a crackdown on bitcoin mining and trading have had a major impact on the crypto investors in the country. The council, whose intention is to cushion investors from suffering financial losses by managing the risks involved in the sector, held the meeting on 21st May and published the minutes shortly after. Crypto has recently been called out as being volatile and high risk.
The meeting was held shortly after China’s CCTV aired a show on the risks surrounding cryptocurrencies. The broadcaster cited legal issues such as black market trade, money laundering, arms smuggling, gambling, and drug dealings as some of the illegal ways crypto can and is being used.
With up to 70 percent of virtual currencies being mined in China, the crackdown was bound to have a significant impact on the market. In related moves, the country recently also banned financial institutions and payment companies from offering services using crypto, thus limiting their transactions, and warned investors against risky markets.
The financial institutions have also been limited in their capacity to provide services such as savings and pledges related to crypto. The ban also includes issuing financial products. This move also intends to restore the economic environment to normalcy through strengthening the stock, forex, and bond markets.
Shortly after the comments reached the media, the market experienced an increase in the number of investors seeking to liquidate their USDTs. The decline was witnessed almost immediately and in the subsequent days, with the market dipping by almost 10 percent.
