Bitcoin Exchange OKCoin Suspends US Dollar Deposits
Bitcoin news sources report that Chinese cryptocurrency exchange OKCoin is the latest addition to the growing list of Chinese digital exchanges that have temporarily terminated US Dollar deposits.
This announcement comes barely a week after the digital currency exchange announced the consolidation of their anti-money laundering requirements on April 10.
In their announcement, the exchange cited issues with the intermediary banks in what appears to be an increasingly worsening situation that is spreading out across a fair number of China-based exchanges.
OKCoin has not yet issued a timeline on how soon they hope to reactivate US dollar deposits.
They did, however, announce that they are working to solve the issue as soon as possible.
Various Bitcoin news sources speculate that the shifting of transactional policies by a good number of China-based exchanges is directly linked to the recent upgrade of the know-your-customer (KYC) and anti-money laundering (AML) requirements.
OKCoin joins a list of exchanges which includes Xapo, Bitfinex, and BTC-E, which are also temporarily suspending any US dollar deposits and withdrawals in light of the newly revised requirements for ALM and KYC.
China-based exchanges such as OKCoin have their fiat reserves in Taiwanese banks, which are not particularly keen on AML and KYC.
The current state of affairs has been largely attributed to the People’s Bank of China, one of the major regulatory forces in the country.
The increased regulatory scrutiny has without a doubt led to the mass abolishment of both KYC and AML regulations, leaving the majority of Bitcoin exchanges desperately searching for other options.
So far, only Kraken seems to thrive in an environment that is crippling most digital currency exchanges in a significant way, seeing that it recently added support for US Dollar wire transfer deposits and withdrawals.
For the moment, OKCoin has advised its users to refrain from wiring any USD deposits since the intermediary banks may reject them.
And while crypto-exchanges such as BTC-e are hopeful that the temporary freezing of USD deposits and withdrawals will only last a month, Bitcoin news sources say that on average it can take even months for a digital currency exchange to move to a different bank.
For USD traders, this translates to a significant amount of downtime until the issue is sorted out permanently.
Experts say that the centralization of digital currency exchanges, although a seemingly convenient part of the ecosystem, are going to cripple the digital currency in the long run.
Bitcoin is molded to work as a peer-to-peer currency, and as convenient as centralized exchanges may seem, they are always affected by banking regulations as is the explicit case in this instance.
Nevertheless, Bitcoin news sources report an unusual calm in a market which is easily thrown into a panic by developments such as these.
If nothing else, Bitcoin news sources shed light on the efficiency of peer-to-peer markets especially since they are not easily swayed by issues such as increased regulatory scrutiny brought on by centralized financial institutions.
Peer-to-peer markets continue to thrive, and are evidently the future of trade.