Cryptocurrency prices crash amid China's crackdown on trading

Cryptocurrency prices continued to plummet on Tuesday after China asked several banks to step up their crypto trading crackdown. Bitcoin price is currently trading around $31,411 mark after dipping below the psychological mark of $30,000. Ether, the second-biggest cryptocurrency, also declined by 3.65% to $1,875. Dogecoin and Binance Coin are down by 19% and 14%, respectively. The global crypto market cap is currently at $1.25 trillion, a 5.46% decrease over the last day, according to Coinmarketcap.com.

Chinese authorities earlier ordered cryptocurrency mining projects to be closed in the major mining center to the southwest province of Sichuan. China accounts for around 75% of the world’s bitcoin mining capacity due to cheap electricity and its established technology supply chains.

China’s biggest banks on Monday promised to refuse to help customers trade Bitcoin and other cryptocurrencies after the central bank said executives were told to step up enforcement of a government ban.

Regulators appear to worry that despite the 2013 ban on Chinese banks and other institutions handling cryptocurrencies, the state-run financial system might be indirectly exposed to risks. Beijing also worries users might evade efforts to monitor and control the financial system.

The four major state-owned commercial banks and payment service Alipay promised to step up monitoring of customers and block the use of their accounts to buy or trade cryptocurrencies.

“Customers are asked to be more aware of risks, safeguard bank accounts and not to use virtual currency-related transactions,” China Construction Bank Ltd. said on its website. Similar promises were issued by Industrial and Commercial Bank of China Ltd., Bank of China Ltd., Agricultural Bank of China Ltd., Postal Savings Bank of China Ltd. and Alipay, operated by Ant Group.

Promoters of cryptocurrencies say they allow anonymity and flexibility, but Chinese regulators warn that might aid money laundering or other crimes.

Bank executives were summoned to a meeting at which they were questioned about their activities and told to “maintain financial stability and security,” the central bank said in a statement.

AP contributed to this story.