Exchanges Cut Off from funding

Some Chinese exchanges have started to receive official shutdown notices from banks stating that they have to stop Bitcoin related business by April 15, 2014. Due to this, it will no longer be possible to recharge accounts via bank accounts. An official statement from BTCTrade can be translated as follows:

“With a heavy heart we make this announcement, that BTCTrade just received a telephone call from our bank the Kejicheng (Tech City) branch of China Agricultural Bank Hangzhou, that if we do not stop using our bank account to conduct bitcoin related businesses by 4/15 our account will be frozen. Therefore, we are forced to stop all RMB deposits by 4/15 midnight, although withdrawals will not be affected at [present].”

The news comes as another blow to cryptocurrencies, which have seen their prices drop significantly over the past 24 hours.

No complete surprise

Two major Chinese Bitcoin exchanges had already confirmed a week ago that they had been ordered to suspend bank transfers from customers. Due to a shift in policy from the People’s Bank of China (PBOC), the exchanges would no longer take new Renminbi deposits. The full statement from BTC38 reads as follows:

“We will strictly comply with the notification provisions of the central bank to suspend the Renminbi recharging service, whereas, the following two services – Renminbi withdraws and the recharging and withdraw of virtual currencies, are still completely normal.”

The move could be very damaging to BTC38 specifically, as most of its traffic comes from China itself. It is expected that other Chinese exchanges will take equally heavy hits. Rumors about China possibly cutting off banking services to cryptocurrency businesses had been making headlines for the past few weeks.

National Australia Bank follows China

The National Australia Bank (NAB) has also started sending letters to business customers that primarily trade in cryptocurrencies, stating that their accounts will be closed on May 2, 2014. This move seems to be driven by panic, following lawsuits against the bankrupt exchange Mt.Gox that named the Japanese bank Mizuho. Mizuho provided banking services to Mt.Gox. It also follows other recent moves by the Bank of Ireland, the Bank of Montreal and now China, which distanced themselves from customers that trade in cryptocurrencies. The letters state that digital currency providers “pose an unacceptable level of risk to NAB’s business and reputation.”