China drafts Bitcoin regulations to block money laundering

SHANGHAI - China is preparing to impose regulatory oversight on trading of Bitcoin to fight use of the electronic currency for money-laundering, Caixin quotes a source close to the matter as saying. The new regulations would roll out next month.

The new regulations grow out of a months-long central bank inspection of the operations of major domestic Bitcoin trading platforms. After the new rules are in place, suspended Bitcoin withdrawals are likely to be resumed, the source said.

Bitcoin trading has caught the attention of regulators since January, when the value of the currency began a roller coaster ride as investors sought to circumvent currency controls amid a decline in the yuan.

In early January the central bank initiated a probe of major Bitcoin exchanges and urged platforms to enforce foreign exchange regulations and rules against money-laundering.

Three of China’s largest Bitcoin exchanges – Huobi.com, BTCChina, and OKCoin – halted Bitcoin withdrawals and started upgrading transaction systems in February to comply with the rules. www.webershandwick.cn (ATI).