Coinbase Global : Bitcoin tumbles after China cracks down on mining, trading activities

* China reiterates bitcoin crackdown

* China state broadcaster warns of systemic risks in crypto

* Bitcoin down 42% from record high hit in April

* Ether down 45% from all-time peak touched earlier this
(Adds new comments, details, updates prices)

NEW YORK/LONDON, May 21 (Reuters) – Bitcoin slid
on Friday after China doubled down on its efforts to prevent
speculative and financial risks by cracking down on mining and
trading of cryptocurrencies.

China’s Financial Stability and Development Committee,
chaired by Vice Premier Liu He, singled out bitcoin as the asset
it needs to regulate more.

The world’s largest and most popular cryptocurrency last
traded down 9% at $37,033, after holding the $40,000 level for
most of the Asian and London sessions. That was roughly 25%
above its Wednesday low, but below its 200-day moving average.

Since hitting an all-time high just under $65,000 in
mid-April, bitcoin has fallen about 42%. It’s down 24% so far
this week.

The statement, which came days after three Chinese industry
bodies tightened a ban on banks and payment companies providing
crypto-related services, marks a sharp escalation of crackdown
against virtual currencies.

Liu is the most senior Chinese official to publicly order a
crackdown on bitcoin. This is the first time the government has
explicitly targeted crypto mining.

“It’s hard to read into the real impact of potential action
by China, as these statements are being made without specifics,”
John Wu, president of Ava Labs, an open-source platform for
financial applications.

“That said, this statement does show the clear risk for
bitcoin mining being so reliant on China, and the wills of its

Cryptocurrency exchanges operating in Hong Kong will have to
be licensed by the city’s markets regulator and will only be
allowed to provide services to professional investors, according
to government proposals to be presented later this year.

Earlier on Friday, China’s state broadcaster CCTV warned
against “systemic risks” of cryptocurrency trading in a
commentary on its website.
“Bitcoin is no longer an investment tool to avoid risks.
Rather, it’s speculative instrument,” CCTV said, adding the
cryptocurrency is a lightly-regulated asset often used in black
market trade, money-laundering, arms smuggling, gambling and
drug dealings.

“We must be on full alert of the systemic risks of
cryptocurrency trading, and avoid becoming the victims of such a
market, or even its manipulators.”

Rival cryptocurrency ether sank 13% to $2,420,
down about 45% from a record high of $4,380.64 nine days ago.

“While some degree of crypto regulation is inevitable, these
overly restrictive policies will result in stifled opportunity
and industry flight away from Asia,” said Jehan Chu, managing
partner at Hong Kong blockchain venture capital firm Kenetic

Mining is big business in China and accounts for as much as
70% of the world’s crypto supply, according to some estimates.

(Reporting by Gertrude Chavez-Dreyfuss in New York and
Thyagaraju Adinarayan in London; Additional reporting by Sujata
Rao in London, Samuel Shen in Shanghai, and Vidya Ranganathan;
Editing by Tom Hogue, Catherine Evans, Kim Coghill and David