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China’s three biggest bitcoin exchanges will soon halt local trading

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China’s two largest remaining bitcoin exchanges, Huobi and OKCoin, announced today they would halt trading services for local customers by Oct 31. This followed a similar notice yesterday from BTCC, another major exchange, about a halt in local trading by the end of this month. The latest service closures will effectively put an end to the yuan-bitcoin exchange markets, once the world’s largest driver of bitcoin trading volume.

Huobi and OKCoin said they would stop taking new customers and yuan deposits immediately. Both noted in their statements (Huobi’s here and OKCoin’s here, both in Chinese) that they would continue to provide “crypto-asset services.” Both also said they received regulators’ “notice and guidance” this afternoon.

A source at OKCoin who requested anonymity says the company is considering peer-to-peer transactions, but it’s not a certainty because current regulations are vague. A Huobi spokeswoman did not elaborate on potential alternative services for the domestic market. Despite its halt to local trading, Shanghai-based BTCC, the world’s oldest bitcoin exchange, said its other businesses, including an international exchange and a bitcoin mining pool, remain unaffected.

News of an imminent halt in local trading at Huobi and OKCoin exchanges broke in the official China Securities Journal earlier today (link in Chinese). Bitcoin fell by more than 20% on the report, briefly touching below $3,000, but has since rebounded strongly, nearly regaining all its losses.

Yunbi, a small Beijing-based exchange, also announced today (link in Chinese) that it was ceasing trading on Sept. 20.

China has been the focus of the bitcoin trading world over the past week, as reports have surfaced with increasing regularity of a ban on bitcoin trading by the government. On Sept. 4 the central bank issued a notice banning the trade of crypto tokens issued through “initial coin offerings” (ICOs), a crowdfunding-like mechanism that has become red-hot of late, allowing blockchain projects to raise well over $1 billion this year. That notice didn’t ban bitcoin or ether, but reports soon followed suggesting that a ban on cryptocurrency exchanges was coming.

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Bitcoin has lost nearly 30% of its value this month, following a Sept 4. government notice banning ICO token trading in China. A Chinese ban on bitcoin trading would affect about 12% of global trade volume, but would not eliminate the yuan-bitcoin market entirely. Exchange operators have said they would continue to act as brokers for over-the-counter trading of bitcoin. And one Chinese exchange operator also told Quartz that his firm and others plan to incorporate outside the mainland to run international exchanges.

While China at one time dominated the bitcoin markets, accounting for over 90% of trade volume, today the dollar and yen markets account for over 75% of volume, according to data provider Crypto Compare. The bitcoin-Korean won pair has also grown significantly this year. Following China’s exchange closures, bitcoin trading there may never recover, but the trends suggest that traders elsewhere will be happy to pick up the slack.

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