|Bitcoin in a spin, hitting virtual wallets
The value of Bitcoins, the volatile virtual currency that has soared in recent months and made fortunes for some, plunged today after China banned its banks from providing related services and products.
China has become the biggest Bitcoin market in recent months as buyers seek to profit from speculating in the virtual currency.
Prices on BTC China, the country's biggest Bitcoin trading platform – which had stood at more than 7,000 yuan each – plunged by more than a third to an intra-day low of 4,523.12 yuan, AFP reports.
The drop wiped more than US$5 billion off the total value of the 12 million-odd Bitcoins currently in circulation.
They later recovered to trade at around 5,700 yuan each.
“Bitcoin is a certain virtual commodity, does not possess the same legal status as currency and cannot and should not be circulated and used in the market as such,'' the People's Bank of China said in a statement issued jointly with other financial regulators.
Chinese banks and other financial organizations are banned from providing bitcoin-related services and products, it said.
It called for enhanced control of online trading platforms for bitcoins to defend against the possibility of money-laundering, and pointed out investment risks faced by the public.
Xinhua news agency reported Tuesday that police in eastern China took three people into custody for allegedly shutting down an online bitcoin trading platform and absconding with the assets of people who invested in it.