China’s latest crypto-crackdown is already claiming its first casualties.

At least five local exchanges have halted operations or announced they will no longer serve domestic users this month, after regulators issued a series of warnings and notices as part of a cleanup of digital currency trading.

China is stepping up scrutiny of its massive cryptocurrency industry just weeks after President Xi Jinping ignited a market frenzy by declaring Beijing’s support for the blockchain technology that underpins the sector. But financial watchdogs including the Chinese central bank have in past weeks ordered cryptocurrency firms to shutter and warned investors to be wary of digital currencies, seeking to rein in a market prone to excesses. Weibo, a Chinese Twitter-like service, suspended accounts operated by major exchange Binance Holdings Ltd. and blockchain platform Tron.

Taken together, the latest wave of shutdowns and restrictions represent the biggest cleanup of the sector since an initial Chinese clampdown in September 2017. Although exchanges that allow users to buy Bitcoin and Ether with fiat money were banned, trading had remained rampant in China through over-the-counter platforms or services that deal with cryptocurrency assets only.

Now, even those alternatives have succumbed to regulators, spooking investors. Bitcoin this week sank to its lowest level in six months at the end of its longest losing streak since at least 2010. The largest cryptocurrency recovered with a 6 percent rebound on Wednesday, but is still poised to post its worst month since November last year.

Twenty of the top 50 exchanges are based in the Asia-Pacific region and accounted for about 40 percent of bitcoin transactions in the first half of the year, according to data from Chainalysis. Within the region, the most exchanges are in China, the research firm found.

Aaron Hu, a 26-year-old computer engineer in the central Chinese city of Changsha, said he moved all the cryptocurrency he holds — several million yuan’s worth — from exchanges like Binance and OKEx to his own wallet address. “The first thing I thought of is how to secure my assets,” he said.

Last week, Chinese exchange operators Bitsoda and Akdex announced termination of service. Rival Biss said this month it had halted operations while executives cooperate with a government probe. Btuex said Monday it would shut in response to Chinese government orders, reopening in future to serve only overseas users. And Idax said on Sunday it would also no longer serve users in China but would focus on users abroad, citing policy reasons.

“It appears that, like everything else within their borders, China feels it needs to have tighter controls on the crypto market including exchanges, miners and asset issuers,” said Katie Talati, head of research at Arca, a Los Angeles-based asset manager that invests in cryptocurrencies. “I do believe, however, they are moving in a similar direction as Japan and other jurisdictions that have tight and clear regulations for crypto businesses.”

For now, uncertainty over how deep the apparent crackdown will run has spurred traders to transfer their money to safer places. Tether, a so-called stable coin pegged to the U.S. dollar, is a popular vehicle for investors to move their money into and out of cryptocurrencies.

One of cryptocurrency’s largest wallet apps, ImToken, said Tether transactions among its nearly 10 million users surged to $66 million on Nov. 22, the day China’s central bank issued its latest warning against cryptocurrency trading. That’s more than double the app’s average daily Tether transaction in October, the IDG-backed startup said.

“The current situation and environment for blockchain in China is still very positive,” Tron founder and cryptocurrency entrepreneur Justin Sun said. “In the short term, it may not get as much progress as we’d expect.”

Timeline of related events

Nov. 13: Binance’s Weibo account was suspended.

Nov. 14: The Chinese central bank’s Shanghai office and the city’s financial regulator issued a notice asking local government agencies to work with cryptocurrency-related companies under their supervision to exit such businesses immediately. On the same day, Beijing’s financial regulator published a statement warning against illegal exchange operations.

Nov. 15: Tron’s Weibo account was frozen.

Nov. 21: Shenzhen financial regulator said in a statement it was looking into allegedly illegal cryptocurrency operations, organizing check-ups and gathering evidence. Separately, cryptocurrency publication the Block reported Binance’s Shanghai office had been shut in a police raid. Binance disputed the report, or that it has fixed offices in China.

Nov. 22: The Chinese central bank’s Shanghai branch said in a statement that companies that have conducted publicity campaigns, or have offered other services to offshore cryptocurrency exchanges, have been ordered to take immediate corrective actions or exit the business.

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