Monthly Archives: April 2014

BTC China's announcement adds to the growing uncertainty regarding regulation in China. Local media had reported that April 15 was a possible deadline set by the People's Bank of China (PBoC) for Chinese banks to freeze the accounts of bitcoin exchanges. Exchanges BTC Trade and Huobi.com both signaled earlier in the month that their banks had closed their accounts on, or close to, this deadline.

This speculation regarding regulation begun in early December 2013, after a price surge in bitcoin which many attributed to growing enthusiasm from Chinese investors. A statement released by the PBoC on December 5 warned of the risks associated with bitcoin, saying that Chinese financial institutions should not trade the digital currency.

Read MoreBitcoin stumbles on fears of China clampdown

Last month, a report by Chinese news site Caixin stated that the PBoC had introduced measures which would target 15 bitcoin-trading websites, adding that banks - who have these companies as clients - would be punished if they failed to close their accounts by the April deadline.

The PBoC moved quickly to deny these reports but these announcements by the exchanges would now appear to contradict that. What's more, BTC China's new announcement means that no exchange is immune to the clampdown with the company being the last exchange to be notified.

Lee iterated to CNBC that the only formal guideline on bitcoin by Chinese authorities was still the communication on December 5. "It has not shown any new guidance," he said, but added that he would take appropriate steps if it did issue an official statement but could not predict what the next step by the PBoC would be.

Read more here:

Bitcoin price slips as China steps up regulation

By Dow Jones Business News, April 28, 2014, 05:05:00 AM EDT

By Chao Deng

SHANGHAI--Chinese bitcoin exchange BTC China is no longer accepting customer deposits in yuan from one of the country's largest banks, China Merchants Bank Co.

The move by the exchange, which had been the largest bitcoin dealer in the world for a brief period last year, is the latest indication of the Chinese central bank's clampdown on trading of the virtual currency.

China Merchants Bank told BTC China to cancel accounts with it, according to a posting by the exchange on its official account with the microblogging site Sina Weibo on Monday.

Last week, China Merchants Bank said it would stop servicing bitcoin-related transactions--the first statement by a major Chinese bank to address bitcoin. The reason behind the move was to "protect public interests, safeguard the legal status of the yuan to prevent money laundering," according to the statement on the lender's website Friday.

The People's Bank of China issued a statement in December banning financial institutions in China from dealing with bitcoin. Since then, the central bank hasn't disclosed further details about its stance, but bitcoin exchanges here have begun to end deposits in yuan after what has been reported to be a behind-the-scenes order from the central bank for payment companies and banks to close bitcoin trading accounts.

Two small bitcoin exchanges, Shenzhen-based BTC 38 and Shanghai-based FX BTC, stopped customer deposits in yuan earlier this month.

Shanghai-based BTC China was resistant to making adjustments, saying it hadn't received any notice from the banks they work with until now. The exchange is continuing to accept yuan deposits from other banks, as well as continuing to accept deposits in bitcoin, according to firm spokesman Kenneth Ling.

The price of one bitcoin was at $422.66 Monday afternoon, down roughly 15% from before China Merchants Bank issued its statement Friday.

Originally posted here:

Bitcoin Exchange BTC China Cuts Ties With China Merchants Bank

By Saumya Vaishampayan, MarketWatch

NEW YORK (MarketWatch) Bitcoin is the hottest investing trend since the Internet, according to venture capitalists who have sung its praises. But the money hasnt exactly followed.

Venture capitalists invested $74.1 million in bitcoin startups across 39 deals in 2013, according to data provided by CB Insights. Thats less than a third of what Internet companies raised in first-round funding in 1995, when Internet leaders like Yahoo, Inc. /quotes/zigman/59898/delayed/quotes/nls/yhoo YHOO -2.16% and eBay Inc. /quotes/zigman/76117/delayed/quotes/nls/ebay EBAY -2.04% were just getting off the ground.

In fact, for all the predictions that bitcoin is on the cusp of blowing up the traditional financial system, investors have largely kept to the sidelines. The last round of funding raised by Oculus VR the maker of virtual-reality goggles Facebook Inc. /quotes/zigman/9962609/delayed/quotes/nls/fb FB -5.19% agreed to acquire last month was more than all of bitcoins VC haul in 2013.

From an aggregate standpoint, a hundred million bucks in venture is a pittance. Its a rounding error, said Matthew Roszak, co-founder of the venture-capital firm SilkRoad Equity. He has a portfolio of 10 bitcoin investments.

Some industries are likely attracting more funding because they are bigger. Software companies, for instance, attracted $11 billion in VC funding last year, according data from Thomson Reuters and CB Insights.

And interest has started to pick up this year. VC investments in bitcoin-related firms rose to $64.9 million across 14 deals in the first quarter, nearly 90% of the money raised last year, according to CB Insights. If funding kept up that pace, it would top $200 million this year.

But its coming from the far back of the pack. The average bitcoin investment was $1.9 million last year. The average investment in biotech, on the other hand, was $9.6 million.

These small-potatoes investments have flown in the face of expectations that the digital currency will bulldoze the way the world uses money, leaving old intermediaries like banks and credit card companies in their wake.

Were still in the very early innings of the bitcoin industry as a whole. If you compare it to the Internet industry, were probably back in 1995 or 1996 and right now its all about infrastructure, said Pamir Gelenbe, a venture partner at Hummingbird Ventures. His firm in late March led a $5 million funding round for the virtual-currency exchange Kraken.

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Market Extra: Bitcoin venture capital money hasnt kept up with buzz