Daily Times

SHANGHAI: China’s central bank said on Wednesday it launched spot checks on major bitcoin exchanges in Beijing and Shanghai, knocking the price of the cryptocurrency down by more than 6 percent.

The probe of bitcoin exchanges, including BTCC, Huobi and OKCoin, was to look into a range of possible rule violations, including market manipulation, money laundering and unauthorized financing, the People’s Bank of China (PBOC) said. It did not say if any violations had been found. On the Europe-based Bitstamp exchange, the bitcoin price fell as much as 7 percent. By 1030 GMT (5:30 a.m. ET), it traded down around 4 percent. On Huobi’s website, the price quoted in yuan slid nearly 10 percent before pulling back to trade about 6 percent lower. Chinese authorities have been ratcheting up efforts to stop capital outflows and relieve pressure on the yuan to depreciate. The currency lost more than 6.5 percent against the US dollar last year.

With bitcoin’s soaring price and the relative anonymity it affords, some believe the digital currency has become an attractive option for tech-savvy Chinese to hedge against the yuan and circumvent rules that limit the amount of foreign exchange individuals can buy each year.