OKcoin and Huobi: unauthorized margin trading service and lack of internal control for AML

According to beijingnews, PBOC Beijing will soon release an announcement that PBOC now has found irregularities of Okcoin and Huobi including unauthorized margin trading, which has caused abnormal volatility in trading market, and a lack of internal control for anti-money laundering.

When interviewed by 8btc exclusively, Okcoin said:

the inspection results should refer to the official announcement of PBOC. Okcoin has stopped the margin trading service and will complete its internal control for anti-money laundering purpose according to the requirements of laws and regulations. The inspection will be over before this Friday.

BTCC: unauthorized some businesses, lack of third-party custodian, unauthorized margin trading service

According to CCTV, PBOC shanghai will soon release an announcement that PBOC shanghai now has found irregularities of BTCC including unauthorized operating some certain businesses unauthorized leveraging services and lack of secure custody of investors’ funds,

PBOC shanghai and Beijing began to carry out on-site inspection in BTCC,Okcoin and Huobi. The inspections will be over most likely before 20th, January, Friday.

BTCC has made an announcement in the post on 8btc forum:

BTCC will cooperate with PBOC closely for the inspection and will correct irregularity. Now BTCC is running normally.

Irregularities instead of illegal behaviors.

Insiders believe all three exchanges have unauthorized margin trading service and lack secure third party custodian. Huobi has been criticized most for its unstable operating network, BTCC for fake trading volume and OKcoin for its wide-spread offline promotion activities. But as 8btc repeatedly says Chinese’s official rhetoric is subtle, Fines or suspension instead of “crackdown” will most like the final results when irregularities instead of illegal behaviors are .Till now PBOC has yet released official announcements.

see our article Why PBoC’s Inspection of Exchanges Matters for Bitcoin Trading to be Better and Analysis: PBOC Possible Stepping in as a Third-party Custodian for Bitcoin Exchanges is Good news as 8btc’s view on PBOC ‘s move.