The Chinese government on Friday announced that all cryptocurrency-related transactions are illegal and promised to end the mining of digital currency and, also warned that it “seriously endangers the safety of people’s assets.”In the wake of this announcement, the price of Bitcoin slumped by more than $2,000.
China is one of the world’s largest markets for cryptocurrency and the Chinese government has taken several steps to regulate the use of cryptocurrency in the country.
In May, Chinese government officials promised to increase the crackdown on digital currencies, as Chinese institutions warned buyers that they would have no security for continuous trading in Bitcoin and other similar currencies online.
The Chinese government said it would consider crypto-related transactions as illicit including services being provided by off-shore exchanges.
China has already banned banks from offering crypto-related services but traders have circumvented this ban by conducting over-the-counter platforms and offshore exchanges.
The Asian nation said crypto-trading had links with money laundering, fraud, and excessive energy usage. In September 2019, 75% of the world’s total Bitcoin energy usage was consumed by China.