Bitcoin price drops after China calls for crackdown on crypto mining

Bitcoin price drops after China calls for crackdown on crypto mining

Budrul Chukrut | LightRocket | Getty Images

The price of Bitcoin fell on Friday following an intensified call by Chinese authorities to crack down on cryptocurrency mining and trading.

Chinese Vice Premier Liu He and the State Council said in a statement that stricter regulations are needed to protect the financial system.

The statement, released Friday night in China, said there was a need to “crack down on Bitcoin’s mining and trading behavior, and resolutely prevent the transmission of individual risk to the social realm.”

Bitcoin’s price on Coin Metrics slipped more than 8.5% as word of the statement circulated, part of a larger plunge that saw the digital currency fall more than 40% from its top. Other cryptos also suffered huge losses, with Ethereum and Dogecoin both falling more than 11% amid continued price collapse for the group.

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China’s tough talk comes just a day later U.S. officials pledged to be tough on those who use Bitcoin to carry out “illegal activities, including tax evasion.” The Treasury Department said it would require reports on crypto transfers over $ 10,000, just like for cash.

The concerns in China covered a number of issues. Much of the bitcoin mining there is done by computer which uses huge amounts of energy to solve complex mathematical problems in order to unlock the cryptocurrency.

Authorities around the world have expressed concerns about how bitcoin and its counterparts are being used illicitly.

“It is necessary to keep the stock, debt and foreign exchange markets running smoothly, crack down on illegal securities activities and severely punish illegal financial activities,” the statement said.

As part of its efforts to streamline the burgeoning digital currency space, China’s central bank was one of the first in the world to develop its own yuan-backed digital currency. The U.S. Federal Reserve announced Thursday that it will soon release a paper outlining its own research into the central bank’s digital currency area.

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