Market Analysis Report (18 Sep 2017)

China Gives Huobi and Okcoin One Extra Month

The ban on China-based exchanges is to be enforced by the 30th of September. However, Huobi and Okcoin have been granted an extra month of life. Reports from local news outlet Caixin suggest that the two exchanges lack of ICO offerings was one of the factors allowing them to continue operating longer than others. The report states:

“Because the two platforms have large numbers of users and have not performed ICO operations, the relevant departments have given Huobi and Okcoin a one-month buffer period to stay open until the end of October before shutting down.”

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Chinese Investors to Trade Bitcoin Over-The-Counter Via Telegram

As Chinese-based bitcoin exchanges plan to shut down, Bitcoin investors are taking their trading elsewhere. They will now focus on broker-facilitated, over-the-counter exchanges. Prior to exchange shutdown notices, most traders conducted OTC exchanges on WeChat messenger. As a result of government crackdowns on Wechat users, investors have made an exodus over to privacy-centric messaging app Telegram. A Quartz article detailed the situation:

“The favored app for arranging OTC trades was WeChat, the ubiquitous platform run by Chinese tech giant Tencent. Now brokers are moving to chat platforms operated by non-Chinese companies to keep the trades going, in response to new rules tightening controls on chat groups.”

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Coincheck Becomes the First Licensed Japanese Bitcoin Exchange

On September 13, the Japanese Bitcoin trading platform and payment processor, Coincheck, announced the firm had been approved to be a licensed “virtual currency exchange.” After bitcoin was legalized as a form of payment on April 1, 2017, all domestic exchanges in Japan must receive authorization from the treasury department and Financial Services Agency (FSA) to operate a virtual currency exchange business.

At the time Coincheck was extremely pleased to see the Japanese statutes pass and said the “newly made law and regulations on bitcoin are going be enormous.” Further, the exchange revealed at the time that all exchange providers must be approved by the FSA. The Coincheck blog this past June explains:

“In order to make the exchanges more secure, cryptocurrency has been handed over to the authority of the FSA. All the exchange providers and other companies that deal with virtual currency will need to be registered by the FSA before they can start operation. It will help to make cryptocurrency exchanges in Japan tighter, more secure, have scrupulous control.”

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