Bitcoin has now dropped $500 after more reports China will ban cryptocurrency exchanges

Bitcoin has plummeted further after China launched a crackdown on cryptocurrencies.

The currency went into freefall on Friday, after reports that China was about to ban cryptocurrency exchanges.

It has continued to decline in value, currently standing at $US4161.62 (£3155), down more than $US500 from a high of $US4698.72 (£3562) on 7 September.

Chinese outlet Caixin first reported the ban on Friday. On Monday, Bloomberg followed up with a report that China would ban the trading of virtual currencies on domestic exchanges, but permit over-the-counter transactions.

Two of China’s biggest bitcoin exchanges, Okcoin and Huobi, have said they hadn’t had any instructions to stop trading. China’s central bank has also not commented on the reports.

The reported ban comes after China decided to ban initial coin offerings, a hot new way for startups to raise funds by generating their own virtual currency or “tokens.” Sceptics say it’s simply an unregulated way for firms to raise money, without going through the due diligence required for conventional fundraising methods like venture capital. Beijing described ICOs as illegal fundraising.

China also barred customers from withdrawing bitcoin in February, but allowed them to resume withdrawals in June.

Get the latest Bitcoin price here.

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