by Tyler Durden The price of bitcoin slid over 1,200 Yuan in heavy trading in China, crashing nearly 20%, and down more than $100 under $800 on comparable US markets Wednesday, after China's central bank said it had launched "spot investigations" on bitcoin exchanges in Beijing and Shanghai in order to fend off market risks.The investigation of exchanges, including BTCC, Huobi and OKCoin, was to look into "possible market manipulation, money laundering, unauthorized financing and other issues", according to the statements posted on the People's Bank of China's website.To regular readers this should come as no surprise: precisely one week ago, when Bitcoin hit record highs in China, we explicitly warned: for those buying into bitcoin here on the momentum, most of which originates in China, we urge readers to be cautious as by now the PBOC has certainly noticed that the digital currency remains one of the final, and most successful, means of bypassing capital controls in China.Should Beijing mandate that bitcoin no longer be a means to illegally transfer capital offshore, there is risk of a dramatic, and sharp, drop in its price.

Well, Beijing noticed, and the "dramatic, sharp" drop in price has taken place as expected; worse with China now openly aggressive against bitcoin "manipulation" it is difficult to see where the next burst of buying momentum will come from, if only in the near term.However, one possibility is that Chinese capital control-evaders will now gravitate to other alternative digital currencies, such as Ethereum, which have so far been far less prominent among Chinese bubble chasers.ETH up as BTC down.How soon until Chinese bubble shifts to Ethereum — zerohedge (@zerohedge) January 9, 2017 As Reuters further adds on the Chinese crackdown, authorities have been ratcheting up efforts to stop capital outflows and relieve pressure on the yuan to depreciate.The currency lost more than 6.5 percent against the U.S.With bitcoin's soaring price and the relative anonymity it affords, some believe the digital currency has become an attractive option for tech-savvy Chinese to hedge against the yuan and circumvent rules that limit the amount of foreign exchange individuals can buy each year.

"Some"... such as this site, which said to buy bitcoin precisely on that catalyst back in September 2015 when it was $230.However, after surging five-fold it was inevitable that China would notice, and the time to take profit had come.The Shanghai arm of the PBOC said it visited BTCC on Wednesday."The checks focused on whether the firm was operating out of its business scope, whether it was launching unauthorized financing, payment, forex business or other related businesses, whether it was involved in market manipulation, anti-money laundering or (carried) fund security risks," it said.In a separate statement, the PBOC in Beijing, where officers visited the offices of OKCoin and Huobi, said "the spot checks were focused on how the exchanges implement policies including forex management and anti-money laundering".A Huobi executive who declined to be named confirmed the PBOC visited their office on Wednesday, but declined to provide details.A spokeswoman for OKCoin told Reuters its platform was operating normally, and it was working with the authorities.

Last week, PBOC officials meet with the three exchanges, and the central bank publicly urged investors to take a rational and cautious approach to investing in bitcoin.Shanghai-based BTCC's CEO Bobby Lee confirmed the visit, but said he believed the company was not out of line.We think we are in compliance with all the current rules and regulations of running a bitcoin exchange in China," he told Reuters by phone.litecoin price euro"I wouldn't call it an investigation.beli hardware bitcoinI think they are working closely with us to learn more about our business model and the bitcoin exchange industry.bitcoin hash to dollarWe had a very fruitful meeting today," Lee said.bitcoin 6 gpu motherboard

Judging by today's plunge in the price of bitcoin, which has taken it back to levels just before last December's blast off, the market disagrees.Law firm Berns Weiss LLP has begun scrutinizing Bitcoin exchanges involved in recent DDoS attacks.It will investigate claims on behalf of the users of crypto exchanges Kraken and Poloniex who may have suffered losses as a result of manipulation and insider trading.mac bitcoin cold storageAlthough it is too early to jump to conclusions, many account holders on major exchanges had their positions liquidated as a result of the attacks and could not do anything about it.bitcoin kurs jahreThe need for more transparent markets is becoming evident.San Francisco-based cryptocurrency exchange Kraken and Delaware-based exchange Poloniex both experienced severe distributed denial of service (DDoS) attacks on May 7-8 that led to many leveraged positions being liquidated.

A large Ethereum sell order was executed within minutes of a DDoS attack on Poloniex.That was a sell order of enough volume to push down the Ethereum price and therefore liquidate positions that had been placed on margin calls.During the attacks, both exchanges were not functioning properly and many users could not log on to manage their account and control their positions.The exchanges, in turn, may have to liquidate users’ positions based on the margin calls.Many users of the exchanges are under the impression that they are victims of market manipulation and possibly even insider trading.Berns Weiss LLP states that if the exchanges or individuals associated with the exchanges, such as employees, broke the law, the owners of accounts affected as a result of the violation could bring forward a lawsuit to recover lost capital.Jeffrey Berns, the managing partner of the firm, says: “The virtual currency/blockchain practice of Berns Weiss LLP has been contacted by various people inquiring about potential legal action against Poloniex and Kraken with regard to the recent sell off at those exchanges in conjunction with DDoS attacks.” .