China's 'New' Crypto Ban Is 10 Days Old, But Panic Sellers Send Bitcoin To $40,900

The People’s Bank of China reiterated its anti-crypto stance on Friday with a “fresh notice” declaring all cryptocurrency-related activities illegal.

What Happened: China’s central bank published a notice on its website stating that all services offering trading, order matching, token issuance and derivatives for virtual currencies are strictly prohibited. 

Following the news, Bitcoin BTC/USD shed $3,000 from its price within a span of two hours. The market-leading cryptocurrency was trading at $45,000 before it dropped 6% to a low of $40,900 at the time of writing.

Yet according to reports from several Chinese residents, the PBOC notice itself was originally issued on Sept. 15 and was only posted online earlier Friday.

PBOC’s announcement about ban crypto got widespread today is was ANNOUNCED ON SEPTEMBER 15TH, but got posted online today. The market already reacted on those regulatory fud.https://t.co/BPlVQEMVMt pic.twitter.com/e0U7gbEHnY

— Molly (@bigmagicdao) September 24, 2021

2017: China bans crypto = 40% dip as Chinese traders and exchanges frantically try to find a way to survive

2021: Media picks up 9 day old article about China banning crypto = 10% dip as noobs panic sell

The difference is clear

— Boxmining (@boxmining) September 24, 2021

The notice itself was a reiteration of the Chinese authorities' previous stance on cryptocurrencies, with only a few new takeaways.

One of those takeaways is that even overseas crypto exchanges are now subject to scrutiny if they facilitate trading activities in mainland China in any way.

These exchanges would not be exempt from illegal status in the country, said the PBOC, which reportedly plans to investigate workers employed by these foreign crypto exchanges.

As noted by Chinese journalist Colin Wu, the most severely impacted tokens are those belonging to major crypto exchanges used primarily by Chinese residents.

Affected by the policy, the tokens of several major exchanges, which are mainly Chinese users, fell sharply. HT fell 18%. pic.twitter.com/sq0xFGdSTZ

— Wu Blockchain (@WuBlockchain) September 24, 2021

The notice also named stablecoin Tether USDT/USD in addition to Bitcoin and Ethereum ETH/USD as an “illegal” crypto asset.

At the time of writing, market-wide fear was still imminent as cryptocurrencies continued to sell off.

Ethereum ETH/USD fell by 9% to a low of $2,800 along with most large-cap altcoins.

Dogecoin DOGE/USD lost 10%, falling to a price of 19 cents. Cardano ADA/USD and Solana SOL/USD fell by 5% and 10%, respectively.

Crypto-focused stocks like Coinbase Global Inc COIN and MicroStrategy Incorporated MSTR sold off during premarket trading, dropping by more than 5%.