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China Cracks Down On Bitcoin, Cuts Off Exchanges' Bank Access

Posted by timothy on from the state-is-still-not-your-friend dept.

jfruh (300774) writes "Bitcoin has made many governments and regulators uncomfortable, and the Chinese government is responding to the challenge it poses with its usual lack of subtlety. Two Chinese bitcoin exchanges have found themselves cut off from the money economy, as Chinese banks, under pressure from the government, refuse to do business with them."

21 of 100 comments (clear)

  1. Chinese getting uncomfortable... by korbulon · · Score: 2, Insightful

    with the idea of someone else cutting in on their currency manipulation business. Yuan? You can't have.

    1. Re:Chinese getting uncomfortable... by i+kan+reed · · Score: 4, Insightful

      Or you know, a well known totalitarian government stamping out a black market currency, you know, to control their citizens, like they've been doing forever.

    2. Re:Chinese getting uncomfortable... by ackthpt · · Score: 3, Insightful

      Or you know, a well known totalitarian government stamping out a black market currency, you know, to control their citizens, like they've been doing forever.

      Funny how they can be all quiet on things like this, then go at them like a rancor beast.

      Fear is a great motivator. Anything they can't control makes their fearful.

      --

      A feeling of having made the same mistake before: Deja Foobar
    3. Re:Chinese getting uncomfortable... by bhcompy · · Score: 2

      I'm pretty sure Anonymous Coward's Slashdot karma is already in the shitter

    4. Re:Chinese getting uncomfortable... by PRMan · · Score: 3, Informative

      Sure. When people are spending all their money building fake malls and fake cities, that's "totally working". [Thumbs up!]

      --
      Peter predicted that you would "deliberately forget" creation 2000 years ago...
    5. Re:Chinese getting uncomfortable... by lgw · · Score: 3, Insightful

      Communist economies are fake economies. Always. In the bad days of the USSR, you couldn't buy anything you really wanted with Rubles, but of course anything else was quite illegal. China today isn't nearly as bad, and they have a mix of genuine capitalist (owned by individuals, not the government) business and government business, so you can buy some stuff with the yuan. But they still have too much fake economy to allow people to legally buy and sell as they wish, and the black market is still a big deal and threatens government control.

      Contrast that to the US, where the only large black market is for drugs, and it's arguable whether anything significant would change if the popular drugs were legalized. It certainly wouldn't bring down the government.

      --
      Socialism: a lie told by totalitarians and believed by fools.
    6. Re:Chinese getting uncomfortable... by lgw · · Score: 2, Insightful

      Please learn what capital controls are. You may also realize that Iceland is not a communist country, yet, it has similar capital controls as the old Soviet Union.

      The 2008 Icelandic financial crash was quite possibly the largest financial collapse in history (bigger ones await us, of course, when the sovereign debt bubble eventually pops, but Iceland was a big deal). The IMF really helped out there, mostly thanks to Scandi generosity and the awesomely great decision to not bail out the banks there. If only we had been so wise.

      So, yes, Iceland has significant capital controls to keep the dressings on the wounds while they heal. But Iceland's looking a lot better now, and the capital controls have perhaps overstayed their welcome. In any case, they had nothing at all to do with Communism, and it was still quite legal to buy consumer goods with krona on free markets - there weren't consumer controls AFAIK. Of course, the sharply fall in the krona meant imports fell sharply in practice, but local businesses that weren't banks kept going as always, though of course hurt by the general economy.

      I wander how much stuff there would be in Walmart if China indicated they would no longer accept USD for goods, but only Euro or Yuan.

      Well, a really significant (if gradually shrinking) chunk of China's economy, perhaps still the majority, is making stuff for the US. If they suddenly stopped doing that, China would implode.

      China is slowly growing away from that, and the US is slowly bringing manufacturing back home (to robots, don't expect any new manufacturing jobs ... anywhere, ever). As long as it's gradual, it's fine. But no one anywhere would benefit from suddenly destabilizing that, so no one will.

      --
      Socialism: a lie told by totalitarians and believed by fools.
  2. Idiots: by mythosaz · · Score: 4, Insightful

    Anyone keeping coins in an exchange for any longer than necessary to exchange them is an idiot.

  3. The Sky is falling! by bobbied · · Score: 2

    So the 2nd largest economy is taking steps to ban BitCoin? Really...

    Can the end be too far away?

    Get back in there at once and sell, sell!!

    --
    "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
    1. Re:The Sky is falling! by michelcolman · · Score: 2

      Let me guess... you're buying?

    2. Re:The Sky is falling! by jeffmflanagan · · Score: 2, Interesting

      Or he just accurately noticed that the commodity has lost value on the exchanges, has no intrinsic value, and may crash completely. Bitcoincharts is down at the moment, but according to other sites, the value has fallen all the way to $455 per btc, which if I recall correctly was at about $550 per btc last Friday. It wasn't that long ago that it was at $1000 per btc.

  4. Re:As they should... by michelcolman · · Score: 5, Informative

    Bitcoin is more traceable than cash. The bitcoin chain contains a record of every bitcoin transaction ever made, anywhere. There are some randomizing anonymizer services which take money from lots of people and return it randomly so nobody knows exactly which amount came from which source, but that kind of services exists for other currencies as well.

  5. Re:Meanwhile, BTC is down to around US$450, yet by SleazyRidr · · Score: 2

    But they were also bullish when it was $900. Maybe it'll get back up there, maybe it'll die. Who knows?

    --
    Is 1563649 a prime number?
  6. Re:As they should... by Lost+Race · · Score: 3, Funny

    There are some randomizing anonymizer services which take money from lots of people and return it randomly so nobody knows exactly which amount came from which source....

    So... sort of a money laundromat?

  7. Sink or swim moment by Lost+Race · · Score: 4, Interesting

    Well, this is it -- an early test of whether Bitcoin can stand on its own as an underground currency. The crutch of traditional currency exchange has been kicked out from under it. Will the bitcoins currently in China be abandoned? smuggled out? or actually used as money like Satoshi intended?

    1. Re:Sink or swim moment by jeffmflanagan · · Score: 2, Interesting

      They'll be sold on LocalBitcoins.com. Most of the sellers accepting Western Union are either in China or Vietnam. I don't think the Chinese government can stop its citizens from receiving WU transfers without raising all kinds of hell.

  8. Re:As they should... by Lumpy · · Score: 2

    Dont have to, because the miner will die of old age before they get any significant bitcoin amounts now.

    Maybe 3 years ago you could mine and make money, not anymore.

    --
    Do not look at laser with remaining good eye.
  9. Totally working == 30% discount for goods/services by drnb · · Score: 2

    Sure. When people are spending all their money building fake malls and fake cities, that's "totally working".

    "Totally working" is undervaluing their currency so that all goods and services that they offer to the US have an inherent built-in 30% discount.

    Its not really the low wages that make manufacturing so attractive in China, its this 30% discount on *everything* compared to domestic US manufacture.

  10. Unsubtle how? by St.Creed · · Score: 4, Interesting

    If the Chinese government had been unsubtle, the police would have arrested the owners and they'd be doing hard labour in a punishment camp in Tibet right now. Telling banks to stop doing business with them is a very very moderate slap on the wrist for people who've been slightly naughty.

    --
    Therefore, by the (faulty) logic you're using, you're just a cow with a keyboard - osu-neko (2604)
  11. Bitcoin is the Segway of money by Animats · · Score: 3, Interesting

    Bitcoin is about as important as the Segway. Bitcoin works, and it does what it's supposed to do - allow one-way irrevocable value transfers between anonymous parties. That's a poor basis for practical commerce, although a boon to a broad range of crooks. It's especially bad that over half of Bitcoin exchanges have gone bust, despite the fact that they shouldn't be at financial risk.

    It looks like Bitcoin will be around for a while, but it's not growing. The block chain transaction rate now is about what it was a year ago. Like the Segway, Bitcoin is kind of cool, and has niche applications, but it's not changing the world.

  12. Do you know what CAPITALISM is ? by Taco+Cowboy · · Score: 4, Informative

    Communist economies are fake economies.

    And just as often, Capitalist economies are as well.

    Because Asset Backed Paper Commodities were basically a giant Ponzi scheme where garbage debt was laundered and passed off to other suckers by the very banks who gave out credit like it was candy.

    Your example does NOT fit the "Capitalism" moniker.

    True Capiltalism abhors ponzi schemes.

    True Capitalism does not create money out of thin air.

    True Capitalism does not engage in Quantitative Easing.

    What America practices is very far from True Capitalism.

    --
    Muchas Gracias, Señor Edward Snowden !