BTCC, one of the largest Bitcoin exchanges in China has announced that it will cease trading in light of the government’s tightening regulation.

The exchange will stop buying and selling on 30 September.

The move is being as a response to the warning issued on Wednesday by China’s National Internet Finance Association (which describes itself as a ‘national self-regulatory organisation’) that cryptocurrencies are increasingly being used tofacilitate illegal fundraising and money laundering.

Although the body is not a formal regulator, it was set up by the People’s Bank of China and was approved by the State Council, so can be considered to be government-backed.

The statement includes the following line about cryptocurrency trading platforms:

“Any trading platform for any kind of so-called ‘coin’ has no legal base of foundation in China.”

BTCC seemed to confirm that its action was a response to regulators when it said in a tweet on Thursday that:

“After carefully considering the announcement published by Chinese regulators on 09/04, BTCChina Exchange will stop all trading on 09/30.”

The news sent bitcoin sliding further, although it has steadied once again. According to Bloomberg, the cryptocurrency has fallen around 28% this week.

Shanghai-based business media Yicai is reporting that Shanghai’s Municipal Financial Service Office has issued verbal warnings to Bitocin exchange startups that are being interpreted as guidance that they should stop trading.

There has been, however, no official statement on this matter from either the People’s Bank of China or any other official sources.

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