#Bitcoin falls after China calls for crackdown on ‘mining,’ trading

The price of bitcoin and other cryptocurrencies dropped Friday after Chinese authorities called for a crackdown on “mining” and trading.

The Chinese government said in a statement that greater reform and regulation is needed to protect the country’s financial system and economy.

Among the recommendations listed, the authorities said it is necessary to “crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field,” according to a Google translation of the Chinese statement.

The statement was the result of a meeting held earlier Friday by the Financial Stability and Development Committee of the State Council, which was presided over by Vice Premier Liu He, who also serves on the 25-member Politburo of the Communist Party of China.

Bitcoin’s price fell more than 8 percent after the statement was published, according to data from Coinbase. The price of ether, the native currency on the Ethereum blockchain, fell more than 13 percent and the price of dogecoin plunged over 14 percent.

Bitcoin was the only cryptocurrency mentioned by name in the statement from Chinese authorities.

“It is necessary to maintain the smooth operation of the stock, debt, and foreign exchange markets, severely crack down on illegal securities activities, and severely punish illegal financial activities,” the statement said.

The statement also touched on using monetary policy to “ensure employment” and support the real economy.

Friday’s statement comes after another issued earlier this week by three Chinese banking and payment industry bodies. On Tuesday, they warned financial institutions not to offer clients any service involving cryptocurrency, including registration, trading, clearing and settlement.

“Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” they said in the statement.

That statement helped prompt a major sell-off that sent the price of bitcoin below $40,000 per coin for the first time in three months.

China has already banned crypto exchanges and initial coin offerings but has not barred individuals from holding cryptocurrencies.

The statement also comes after US regulators signaled Thursday that they could soon crackdown on cryptocurrency here in the States. The Treasury Department announced it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service, saying that cryptos pose a rise of tax evasion.

Julius de Kempenaer, senior technical analyst at Stockcharts.com, told the Post earlier this week, before China’s Friday announcement, that a rapid recovery of bitcoin and the broader crypto market is possible, but the overall upside potential is limited and the downside risk is huge.

“The saying never catch a falling knife seems very appropriate as it is raining knives in the crypto space at the moment,” he said.