Bitcoin investigation looks into possibility of fraud

People’s Bank of China launched an on-site investigation of bitcoin trading platforms in Beijing and Shanghai Wednesday, in a bid to better regulate trading of the virtual currency, according to two separate statements from PBOC and PBOC Shanghai Head Office.

The platforms include BTCC, Huobi and OKCoin, major trading platforms of the encrypted currency whose value fluctuated more than 30 percent in the past two months.

The investigations are looking into possible market manipulation, money laundering, unauthorized financing and other issues that expose the financial market and investors to risks, said the statements.

PBOC Shanghai Head Office has previously warned investors over the risks of storing value into the virtual currency, which is “not and should not be regarded and used as a currency in circulation”, said a statement the office posted on their official website last Friday.

Bitcoin’s value reached a record-high at about 8,700 yuan ($1,257) on Jan 5, but saw one-day loss of about 15 percent the very next day.

Data of transactions at BTCC showed that the bitcoin price dropped 6.55 percent Wednesday to 5,915.55 yuan per unit as of 6 pm Beijing time.