25 January 2017, 5: 21 pm Beijing time, PBOC said the on-site inspection for Huobi and Okcoin is still underway for more possible misbehaviors of the exchanges.

The announcement reads:

Recently PBOC Beijing, together with Financial Office of Beijing Government, Beijing Bureau for Industry and Commerce have been carrying out on-site inspection of Huobi and OKcoin. Based on the situation of the initial inspection and the problems that have been found, the inspection group now decides that the group will continue the inspection focusing on issues including payment and clearance, anti-money laundry, foreign exchanges, information and fund security. The inspection team here reminds investors that they should pay proper attention to law-compliance of exchanges, market fluctuations and fund security and thus investing Bitcoin prudently。

This the third notice from PBOC since it said it had inquired the major heads of three major exchanges on 6th January 2017. On 11th January 2017 PBOC announced it began to launch on-site inspections on three exchanges.

Here is the timeline for PBOC’s move, the responses from the 3 exchanges and the Bitcoin price on each day.



It’s obvious the incrementally stringent monitoring moves by PBOC from “inquiry” to “continue inspection” have been showing decreasingling negative impact on the Bitcoin price as it is most a general recognition that PBOC’s recent move is in the interest of a more stable, regulated and standardized bitcoin trading market.

PBOC’s concerns initially was the financial stability caused by volatility of Bitcoin price. As all three exchanges removed margin trading service and began to charge service fees, which resulted huge drop of China’s trading volumes, the bubble of the market seems to being confined. Now PBOC focuses on issues like anti-money laundry, foreign exchanges, information and fund security, aiming at building a more regulated market.

PBOC’s next moves could be fines or even suspension of the exchanges. For the legislative level, to set up third-party custodian for exchanges’ fund of Bitcoin and cash, and the licensing system could be the possible options for PBOC.

Till now PBOC shangshai to which BTCC is subject has yet announce the similar statement as PBOC Beijing for OKcoin and Huobi, but it is highly likely the situation is the same for BTCC based on past experience.

The point of this statement is that it said”Based on the situation of the initial inspection and the problems that have been found”. This means PBOC literally confirmed they have found problems in the exchanges but more details will be disclosed when the inspection is finished. On 18th this month there are sources claiming PBOC would soon confirm that problems including unauthorized margin trading service and incomplete internal control for anti-money laundry are among the irregularities PBOC have found in three exchanges. But till now no official announcement for it.

See our articles 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.