TechnoMeter

Chinese Virtual Coin Firms to Circumvent PBOC Onslaught by Going Offshore

By Forexminute - Deepak Tiwari | Bitcoin | May 12, 2014 10:19PM BST



Chinese bitcoin companies are planning on sidestepping the government crackdown on the virtual currency.

The currently biggest exchange in China, Huobi, is thinking about moving operations international to protect its customers.
“We are trying to create an offshore account and to go international. We don't want to touch the customers' money in China, because maybe [regulation] is going to get worse,” Leon LI, founder and CEO of Huobi told the South China Morning Post.

Before PBOC’s restrictions took effect, it was possible for customers to deposit or transfer money through the company’s account in mainland China. Such transactions may not be possible in future; with offshore accounts being an alternative way around mainland’s stringent banking system.

Li was among chiefs of the five most dominant bitcoin firms in China, who didn’t attend an international bitcoin meeting in Beijing over the weekend to avoid raising the gathering’s profile.

"You can see the pressure being applied from different angles," said Bobby Lee, the CEO of BTC China and who also never attended the weekend gathering.

Lee said his bitcoin exchange that’s based in Shanghai had resorted to use of paper vouchers to handle transactions while avoiding mainland financial institutions.

Since China started the crackdown on bitcoin, the country’s biggest banks have severed links with bitcoin. The Industrial and Commercial Bank of China, the largest bank in the world by assets and market capitalization, has just cut ties with the virtual currency, entering the list of others that have moved in that direction.

Lee, who formerly engineered for Yahoo, said the measures on bitcoin meant that traders on the mainland were unwilling to deal in the digital currency.

According to Coinreport, Hong Cheng, managing director of a bitcoin ATM maker BitOcean, said that if China continued to mount pressure on bitcoin, his company would relocate elsewhere in Asia.