Domestic cryptocurrency traders will be banned from buying into initial coin offerings (ICOs) and trading on overseas platforms, according to Caixin Global, as government regulators continue their low-tolerance approach to virtual currencies.
Many traders went to overseas platforms in recent years after the Chinese government initiated its crackdown on cryptocurrency investment. However, some companies remained in operation, exploiting a loophole in government legislation by allowing Chinese traders to buy the cryptocurrencies ‘over-the-counter’ through online payment methods.
“After domestic exchanges closed, many users switched to overseas platforms to continue trading cryptocurrencies,” the Financial News, a state media outlet, said. “But risks remain, including illegal issuance, fake projects, fraud and even pyramid selling. It may be even more difficult for investors to recover any losses.”
Despite this, Bitcoin recovered overnight from a three-month low of just below USD6,000. The price of Bitcoin has recovered to just above $US7,800. Majority of the other cryptocurrencies have also recovered.
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