China's crypto crackdown wipes out nearly $300 billion in market value

China's renewed crackdown on the cryptocurrency industry has wiped out nearly $300 billion in value from the total digital currency market since Friday. Bitcoin, ether, XRP and other digital coins fell sharply. On Friday, authorities in China's Sichuan province ordered cryptocurrency miners to shut down their operations. And the People's Bank of China urged financial institutions not to provide services related to cryptocurrency activities. Subscribe to CNBC PRO for access to investor and analyst insights on crypto and more: https://cnb.cx/2BT2E7y

China’s renewed crackdown on the cryptocurrency industry has wiped off around $400 billion in value from the total digital currency market since Friday, when a major bitcoin mining hub ordered miners to shut down operations.

Bitcoin was down more than 8% in the last 24 hours, trading at $29,791, at around 8:40 a.m. ET on Tuesday. It broke below $30,000 for the first time since Jan. 27, according to CoinDesk data. Other cryptocurrencies including ether and XRP were also sharply lower.

Over the past few days, China has stepped up its efforts to rein in the country’s cryptocurrency industry.

Mining ban, PBOC warning

On Friday, authorities in China’s Sichuan province, ordered cryptocurrency miners to shut down their operations, according to multiple media reports. Sichuan is one of the biggest bitcoin mining centers in China.

Many bitcoin mines in the southwestern Chinese province were closed as of Sunday, according to state-backed tabloid the Global Times.

The move in Sichuan comes after other mining-intensive provinces in China, including Inner Mongolia, also shut down crypto mining. In May, Beijing called for a crackdown on bitcoin mining, highlighting how the order has trickled down from the top.

Then on Monday, the People’s Bank of China said it spoke to Alipay, the payments service run by Alibaba affiliate Ant Group, and some major financial institutions. The central bank said it urged them not to provide services related to cryptocurrency activities, including account openings or clearing and settlement.

These are not new rules, but the PBOC’s comments show how China’s top regulators are stepping up monitoring and pressure on financial institutions related to cryptocurrencies.

China banned local cryptocurrency exchanges in 2017 forcing them to move offshore. That did not stop Chinese traders buying and selling digital coins, though it added a layer of complexity to crypto trading.

Chinese traders would have to move their Chinese yuan to a platform to buy crypto. That would be done via a payments service like Alipay or a bank account. So the PBOC’s latest reminder to financial institutions could be looking to stamp this out further.

Since Friday, when the Sichuan authorities notified miners to shut down operations, bitcoin is down around 16%. The central bank notice added further pressure.

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