Topic: [FUD] China prohibits banks providing settlement services to Bitcoin Exchange (Read 18499 times)

So what's bitcoin's future in China?

China did not ban bitcoin as such, but just certain businesses.

I think the way how people in China can buy & sell bitcoin in the future, should today's bitcoin exchanges become non-operational for legal reasons, is to do it via an escrow platform like the european "bitcoin.de" - there is never any fiat money flowing to or from bitcoin.de.

This mode may look strange for those of you only familiar with "traditional" modes of exchanges, but bitcoin.de is in fact the second largest EUR/BTC market behind MtGox (http://bitcoinwatch.com), and it is very usable as long as you only trade from time to time and not several times a day.

It works like this:
- Buyer and seller open a web account at bitcoin.de.
- A seller transfers some bitcoins to his online wallet at bitcoin.de.
- A seller can place a limit order for some bitcoins he wants to sell, or directly accept a buy offer from someone else.
- A buyer can place a limit order for some bitcoins he wants to buy, or directly accept a sell offer from someone else.
- If a deal is made, the seller's bitcoins get "frozen", and both buyer and seller receive an email
  from bitcoin.de (and have it shown in the web browser):
  - The buyer is requested to send xxx.xx units of fiat currency directly to the fiat bank account of the seller,
     with a unique code in the reference field. He has to do so within [12/18/24] hours (adjusted by bitcoin.de
     based on market volatility). He has to indicate in the bitcoin.de system that he has triggered the transfer
     as soon as he has done so.
  - The seller is asked to check his bank account and confirm reception of the fiat transfer at bitcoin.de.
- When the seller confirms receipt of the fiat money, bitcoin.de will transfer the (frozen) bitcoins to the buyer's online wallet
  and the deal is concluded.

If the buyer does not transfer the fiat money within the [12/18/24] h period, he'll get a negative rating and the deal gets cancelled.
Otherwise, buyers and sellers are asked to rate each other after the deal.
Acc. to the rating system there are gold, silver and bronze users, and everyone is free to accept only users of a certain rating class. Also a personal white/blacklisting is possible.

How does bitcoin.de take commissions?
bitcoin.de takes 1% commission for each deal, so both buyer and seller contribute 0.5% (actually, from the buyer's point of view it looks like 0.50505%, see example below). It works like this example:
- Assume that the deal is about 1 BTC for 1000 fiat currency units.
- The buyer is requested to pay 995 fiat currency units to the seller (1000 - 0.5%).
- From the seller's 1 BTC, 0.01 BTC (1%) go to bitcoin.de as commission, and 0.99 BTC (1 BTC - 1%) go to the buyer.

So the deal looks like this:
- From buyer point of view, he got 0.99 BTC for 995 currency units (so he paid a price of 1005.05 fiat units per BTC (5.05% fee)
- From seller point of view: He sold 1 BTC for 995 currency units (so he sold for a rate of 995 fiat units/BTC (5.00% fee)
- From bitcoin.de point of view: They earned 0.01 BTC commission for a 1 BTC deal (1%)

Fraud prevention:
It has happened in the past that fraudulent buyers transfer the fiat money from a stolen (not their own) bank account for example by filling out money paper transfer forms from any bank and falsify the signature (banks normally do not check the hand-written signature). The seller received the money and acknowledged it and the bitcoins were credited to the buyer by bitcoin.de. Later, the fraud was detected by the 3rd person whose bank account was mis-used without his knowledge, and the fiat money transfer was reverted by the involved banks. Now the seller was left with having neither bitcoins nor fiat money.
Today bitcoin.de prevents this fraud attack by telling the seller the bank account details of the buyer! So the seller shall check if the incoming payment really origins from the correct bank account (which was formerly verified by bitcoin.de). Note that some banks do and some banks do not give their customer the information of the bank account number of the sending side for an incoming payment.

Dispute handling:
In very rare cases it may happen that the buyer says that he has transferred the money while the seller says he has never received any fiat payment, i.e. one of the two is lying. In this case bitcoin.de has to ask for proofs (scans of bank statements etc.) from both parties, or even for an authorisation to query the bank directly with regard to the particular payment. Then bitcoin.de has do decide who is telling the truth and whether or not to transfer the bitcoins from seller's to buyer's online wallet.

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I think that a web service like bitcoin.de can be readily established for the Chinese market, either within China (if legal - maybe the new operational model of btcchina?), or otherwise in Taiwan or any other country. For this service the platform does not need to reside in China, since no fiat money transfer happens between users and this platform.

The advantages and disadvantages of this model:
(-) A little more complicated for the user
(+) User does not need to "pre-pay" fiat currency to the exchange
(-) Automated frequent intra day trading not possible - all trading requires *human* interaction
(+) The previous point also has it's pros because market manipulations by the exchange (who may exploit insider knowledge of the order book) or "stop loss avalanches" are avoided, potentially yielding more stable exchange rates...
(+) This mode does not require fiat money flows between user and the platform, so it could well reside outside China, as long as it is trusted not to embezzle online wallets' bitcoins and as long as it is trusted to do good escrow service on the users' bitcoins funds.

So the future is not as dark as one may think.

Does this make sense what I wrote here?

I am not a moderator nor do I have any influence on what the mods decide or not decide to do.

The title of the OP is *factually incorrect* as it currently stands (as you *can* withdraw RMB from btcchina and okcoin right now) - so my point was if you think it is fair enough to remove the [FUD] then I also think it would be "fair enough to remove the FUD".

I am not "above you" but I think I might make more sense than you do (as you are the one calling to have the [FUD] prefix removed whilst leaving the actual FUD in place).

This is abuse of power. That is why Bitcoin was invented in the first place. To stop people like you who think they are above others.

You can still withdraw RMB from bitcoin exchanges in China so the title is still *wrong* as stands.

If the OP wants to get the FUD removed then they should change the word "settlements" to "deposits".

Yes. I agree very much.

Can we remove the [FUD] marker from the thread title? And be a little bit less eager next time to scream FUD!!! before we have solid information?

I knew this probably wasn't FUD.  What tipped me off was someone selling 5k coins at market like 1 hour before this post.

Those crafty chinese. Well we'll see where it goes. Right now BTC-e is at $662 and Gox is at $722

So... I'm usually news agnostic as it makes very little difference to me in the short run (I'm in it for the long run), and thus I don't keep myself up to date or attentive at all but this seems too obvious to be a coincidence;

- China says "bitcoin probably alright", price jumps ten fold
- China decides they're through buying USD (read it somewhere, might have read it wrong)
- China says "bitcoin is somewhat illegal, you have a short timespan to get out", everyone sells, price drops

Now, if it was me I would say 'China says' is a great market direction trigger, and if I were China (govmnt) I would buy as it drops (sure, it's illegal... for the common people) and then by CNY say "good news, bitcoin's probably alright again", thus re-inflating all the coins bought cheap.

Is it not just a tad bit too obvious?

Guys just copy and paste this to google translator and you will figure it out what they are talking about.

Are you Chinese chsados?

So all it says that
1) Businesses aren't allowed to accept Bitcoins (we knew that before)
2) You can't use the Chinese Paypals anymore to fund your account
3) You still can deposit and withdrawal to BTCN etc.

I don't see a big problem here.

This is terrible news:

source: http://tech.sina.com.cn/it/2013-12-17/01139011174.shtml#483253-tsina-1-18627-1cf60a7c37a7bc296a2ba7aba0120190

1. This article is posted on sina. Sina is the top 5 online medai brand in China, equivalent to Yahoo here.

2. The rumor posted on Chinese version of twitter(weibo) is true.

3. People's Bank of China banned all the third party payment company doing business related to bitcoin, including bitcoin exchange platforms.

For those who is currently doing, they are required to completely cut off bitcoin related business by the Chinese new year, which is at the end of Jan 2014.

For the business held by entity outside of China, they haven't decide what to do, but very likely to be negative.

3. Btcchina is operated in the Shanghai's new pilot free trading zone. It is at a awkward spot. They has terminate the partnership with Tenpay(probably second largest third party payment company under Alipay). They are now using Yeepay, which is probably a random small company I have never heard of.

4. You can now only withdraw your fiat fund from btcchina through online banking. You can still deposit via Yeepay and online banking, for now.

5. After Dec 5, small merchants or online shop owner could still accept bitcoin as payment and comfortably convert them to rmb through exchange like btcchina. In the future , this is going to be much harder and completely illegal after the Chinese new year. Basically, bitcoin is dead in China for the most part. People can only use it as speculative investment and store of value, but it is going to very hard for them to realize their potential profit legally in the future.

6. In the future, if bitcoin still managed to success internationally without China market, people in China would still be able to own it and sell it in a similar way how people deposit and withdraw money from Pokerstars. But it probably wouldn't be a hot topic as it was months ago.

7. People ask if btcchina will be shut down. I don't know. Btcchina is the only exchange located in the Shanghai's free pilot trading zone, it could possibly survive. But the best case scenario is that btcchina is going to the only one left.

Since people couldn't read, I just made make some words bold.

More like we need to bribe someone in the financial sector

We really need a Chinese translator we can trust and is known in the community how can translate this sort of stuff fast. This overreactions are so annoying.

This doesn't surprise me. A few exchanges are charging a fee now because they were losing money by paying the network fee. Cavirtex is one of them.

Yeah I agree here, there is no well known news website that is touting this.  This is probably just to get the price to drop for cheap coins.

Nobody knows and the reddit threads that are created en masse smell of FUD and fake.

Meaning what?

防范比特币风险连出招
央行约谈第三方支付“釜底抽薪”？

http://epaper.yicai.com:81/site1/html/2013-12/17/content_198652.htm

严湘君

　　“央行规定第三方支付机构不得为比特币交易网站提供托管、交易等业务。”昨天下午，央行召集第三方支付公司开会透露出上述消息。

　　《第一财经日报》记者独家获悉，继12月5日发布《关于防范比特币风险的通知》（下称《通知》）后，央行昨日再度“出击”，约谈10余家第三方支付公司相关负责人，明确要求其不得给比特币、莱特币（LTC）等的交易网站提供支付与清算业务。

　　在半个月不到的时间里，央行连出“两招”防范比特币风险，而此次会议所传达的精神更是被不少比特币业内人士解读为“釜底抽薪”。

　　第三方支付“三条线”

　　一家大型第三方支付公司的参会人士对本报记者证实，昨天上午，10余家第三方支付公司受到央行召集，在北京召开了一次闭门会议。上述人士在接受本报记者采访时透露，会议由央行支付结算司副司长周金黄主持，每家公司都派出了1~2名相关人士参会。

　　“周司长在会议开始时就明确指出，此次会议并非是召集各家公司讨论关于比特币的相关业务是否能开展，而是传达央行高层的态度，即首先第三方支付公司不得给比特币、莱特币等交易网站提供支付和清算服务；其次，对于已经发生业务的支付机构应解除合作，存量款最迟在春节前完成提现，不得发生新的支付业务；第三，严格执行12月5日央行发布的《通知》。”上述第三方支付公司人士告诉本报记者。

　　另据本报记者拿到的第三方支付公司一位参会人员所记录的会议纪要，此次会议，除规定不允许境内第三方支付机构从事与比特币相关的业务外，央行也会在会后研究针对在境内接入比特币相关业务的境外支付机构的相关规定。

　　周金黄在传达相关精神后，各家支付公司均作出了将严格执行上述三条要求的表态。但值得注意的是，全球最活跃的交易网站之一BTCC（比特币中国）以及比特币、莱特币交易网站OKCOIN已经将第三方支付机构从原先合作的财付通换成了另一家第三方支付公司，同时，有用户反映，两家网站目前只能用财付通提现，但不能通过其充值。

　　“支付宝一直都没有和任何比特币交易网站有过商业合作，”支付宝相关人士在接受本报记者采访时表示，“如果有投资者发现充值渠道为支付宝，则需要警惕对方是否为个人账户，如果确实是个人账户，请投资者一定要留意风险。”

　　有比特币业内人士认为，从昨日央行会议的内容来看，央行对于比特币可能造成的风险防范力度较大，但他也同时表示出不解，因为此举或许会令原本在线上公开透明的比特币交易平台转移至地下，监管难度更会随之上升。

　　比特币在中国未来堪忧？

　　“《通知》发出来之后，我们就在担心第三方支付这个事情会不会就做不了了，没想到一语成谶了。”一家比特币交易网站负责人在听到上述消息后对本报记者说。

　　与《通知》发出后绝大部分业内人士所认为的“口径较为宽松”，甚至“监管的一次创新”不同，此次央行会议的精神明显给比特币行业造成了一定的打击。不少业内人士都表示，比特币在中国未来的发展形势堪忧，将选择不同程度的“出逃”，或转移至境外交易平台进行比特币交易。

　　此前，央行的《通知》曾明确要求现阶段各金融机构和支付机构不得开展与比特币相关的业务，不得以比特币为产品或服务定价，不得买卖或作为中央对手买卖比特币，不得承保与比特币相关的保险业务或将比特币纳入保险责任范围等。《通知》发出后，虽然比特币市场有所异动，出现短时间的下跌，但很快即收复“失地”。

　　而昨日的会议会对比特币价格造成多大影响还不得而知，但截至本报记者发稿，BTCC上比特币的价格已经从昨日最高的5335元下跌至4600元，下跌幅度为15%。

　　（本报记者夏心愉对此文亦有贡献）

At least in regards to this issue - it does not appear to be a browser bug but instead a bug with their "old website" (an option you can click on).

If you use the "new website" (which is the default for new users) then this problem is not occurring as far as I am aware.