Chinese Crypto Exchanges Continue To Suspend Services Amidst Regulatory Uncertainty

Although crypto markets seemed to recover from the recent fall, some believe that regulatory uncertainties surrounding Bitcoin mining and trading firms in China could lead to even more sell pressure going forward.

What Happened: On Friday, a State Council committee led by Vice Premier Liu He announced a crackdown on crypto mining and trading as part of efforts to mitigate financial risks in the economy.

Given the seniority of the committee passing the order, panicked miners began to sell a large portion of their cryptocurrency holdings leading to Bitcoin’s price falling as low as $31,000 on Sunday.

Despite a recovery to $37,000 aiding some sentiment in the market, more news of several Chinese exchanges suspending services to certain market participants added to mounting fears in the crypto market.

Huobi, which is considered the largest Chinese crypto exchange, announced it would be suspending the provision of services for new users in mainland China.

Following Huobi, Amber Group, a Hong-Kong based crypto service provider that raised $28 million from high-profile investors like Coinbase Global Inc COIN and Pantera Capital, said it would suspend services to Chinese customers beginning June 1.

According to a report from Chinese reporter Colin Wu, the most severe measures were taken by derivatives exchange Bybit, which said that it would close the accounts of all registered users of Chinese mobile phone numbers by June 15.

“Within the next week, the Chinese government will have a high probability of launching specific crackdown measures, which will cause a new round of panic,” commented Wu in a report.

See also: China Cryptocurrency Warning Fears Leads To Extended Crypto Selloff

Meanwhile, Nic Carter, founder of blockchain data aggregator Coinmetrics, revealed that on-chain indicators seemed to suggest that miner selling was a “huge driver” of price action.

“Everything I’m seeing indicates an absolutely seismic shift of hashpower out of China and into the world at large. It won’t be elegant or pretty but obviously, it’s great for hashrate distribution,(sic)” he said on Twitter.