Bitcoin Price Drops After China Intensifies Crypto Crackdown

The price of bitcoin and other cryptocurrencies slid Monday after China’s central bank ordered the country’s largest banks and payment processors to take a more active role in curbing cryptocurrency trading and related activities.

The People’s Bank of China on Monday said it summoned representatives of multiple institutions—including state-owned commercial banks and Ant Group Co.’s Alipay—and told them to “strictly implement” recent notices and guidelines from authorities on curbing risks tied to bitcoin and cryptocurrency fundraising activities. It was the latest sign that Beijing is intensifying its crackdown on unregulated virtual currencies.

Bitcoin slipped to $32,622, down 9% from Friday, according to CoinDesk. That marked bitcoin’s lowest price at 5 p.m. ET since late January.

Ethereum, the second-biggest cryptocurrency by market value according to trading platform Kraken, lost 14% to $1,941. Dogecoin, which started as a joke in 2013 before setting the internet abuzz and shooting up in price this year, 27% to about 21 cents in its eighth consecutive daily decline.

The financial firms were also instructed to go through their systems to investigate and identify customers with accounts at virtual-currency exchanges or that trade cryptocurrencies in the over-the-counter market. In such cases, the institutions have to cut off the accounts’ ability to send or receive money for transactions, the central bank said.

Chinese authorities have stepped up a nationwide campaign against virtual currencies in recent weeks, after a powerful superregulator pledged to crack down on cryptocurrency trading and mining in the country.

The regulatory warnings followed a spike in the price of bitcoin, which traded near $65,000 in mid-April, spurred on by celebrity advocates including Tesla Inc. Chief Executive Elon Musk. It has since lost close to half its value.

Among the factors weighing on bitcoin and its peers are the prospect of greater regulatory oversight of crypto trading in the U.S. and renewed efforts by Chinese authorities to restrain the production of bitcoin by power-hungry computers.

China several years ago imposed bans on domestic cryptocurrency exchanges and digital-currency fundraisings known as initial coin offerings. Authorities also previously instructed payment providers and banks to stop providing virtual-currency trading and related services, and ordered the closing of mines.

Despite those efforts, China has remained a hotbed for cryptocurrency mining.

Up to three-quarters of the world’s supply of bitcoin has been produced in China, but the mining process devours electricity—conflicting with the government’s climate goals.

People in China have also continued to trade bitcoin and other digital currencies via peer-to-peer transactions that involve direct money transfers between accounts.

Some cryptocurrency trading platforms that operate offshore have been facilitating trades between people who want to buy bitcoin with China’s domestic currency, the yuan. In such instances, buyers have used accounts at banks or digital-payments providers to transfer money to people selling cryptocurrencies, often without disclosing the purpose of the transfers.

The PBOC on Monday warned of the risks to economic and financial stability created by virtual currencies, and the potential for the assets to be used for illegal activities. Chinese police recently arrested more than a thousand people who were suspected of using cryptocurrencies to launder ill-gotten funds.

Alipay said it would intensify efforts to monitor and investigate its accounts for cryptocurrency-related transactions, and block or remove offending users. The popular digital payments platform is used by more than one billion people in China and more than 80 million merchants.

Alipay also plans to use risk algorithm models to help detect abnormal transactions, flag suspicious activities, and restrict certain accounts from receiving money. It added that merchants that have engaged in virtual currency transactions would be blacklisted and banished from its platform.

“We reiterate that Alipay does not conduct or participate in any business activity related to virtual currencies,” its statement said.

Five banks, including Industrial & Commercial Bank of China Ltd., Agricultural Bank of China Ltd., China Construction Bank Corp., Postal Savings Bank of China Co. Ltd., and Industrial Bank Ltd., said in separate statements that they prohibit the use of their accounts for virtual currency transactions.

They pledged to promptly put a stop to such transactions, close bank accounts and report signs of such activities to the authorities. They also called on members of the public to report virtual currency-related transactions to the banks.

Chen Shujin, an analyst at Jefferies, said the central bank’s directive to the financial firms is aimed at cutting off payment mechanisms used by Chinese individuals and businesses involved in cryptocurrency trading and mining. She said peer-to-peer transactions, however, are difficult to track and identify because they tend to be small-scale and anonymous.

“This will make it harder [for people to trade], but it won’t be able to completely shut down this type of transactions,” Ms. Chen said. She added that some individuals could try to get around the rules by remitting funds overseas and conducting cryptocurrency transactions offshore in other currencies.

Corrections & Amplifications
Chinese police recently arrested more than a thousand people who were suspected of using cryptocurrencies to launder ill-gotten funds. An earlier version of this article incorrectly said police made thousands of arrests. It also incorrectly had reporter Chong Koh Ping’s byline as Chong Koh. (Corrected on June 21.)

An original watercolour illustration for the cover of Harry Potter and the Philosopher’s Stone, 1997 — the first book in J.K. Rowling’s hit series—could sell for US$600,000 at a Sotheby’s auction this summer.

The illustration is headlining a June 26 sale in New York that will also feature big-ticket items from the collection of the late Dr. Rodney P. Swantko, a surgeon and collector from Indiana, including manuscripts by poet Edgar Allan Poe and Arthur Conan Doyle, author of the Sherlock Holmes books

The Harry Potter illustration, which introduced the young wizard character to the world, is expected to sell for between US$400,000 to US$600,000, which would make it the highest-priced item ever sold related to the Harry Potter world. This is the second time the illustration has been sold, however—it was on the auction block at Sotheby’s in London in 2001, where it achieved £85,750 (US$107,316).

The artist of the illustration, Thomas Taylor, was 23 years old at the time and a graduate student working at a children’s bookshop. According to Sotheby’s, Taylor took a “professional commission from an unknown author to visualise a unique wizarding world,” Sotheby’s said in a news release. He depicted Harry Potter boarding the train to Hogwarts on platform9 ¾ platform, and the illustration became the “universal image” of the Harry Potter series, Sotheby’s said.

“It is exciting to see the painting that marks the very start of my career, decades later and as bright as ever! It takes me back to the experience of reading Harry Potter for the first time—one of the first people in the world to do so—and the process of creating what is now an iconic image,” Taylor said in the release.

Meanwhile, to commemorate the 175th anniversary of Edgar Allan Poe’s For Annie , 1849, Sotheby’s recently reunited the autographed manuscript of the poem with the author’s home, Poe Cottage, in the Bronx.

The cottage is where the author lived with his wife, Virginia, and mother-in-law, Maria Clemm, from 1846 until he died in 1849. The manuscript, also from the Swantko collection, will remain at the home until it is offered at auction at Sotheby’s on June 26 with an estimate between US$400,000 and US$600,000.

The autographed manuscript will remain at Poe Cottage until it is offered at auction at Sotheby’s on June 26.
Matthew Borowick for Sotheby’s

Poe Cottage, preserved and overseen by the Bronx County Historical Society, is home to many of the author’s famous works, including Eureka , 1948, and Annabel Lee , 1927.

“To reunite the For Annie manuscript with the Poe Cottage nearly two centuries after it was first composed brought to life literary history for a truly special and unique occasion,” Richard Austin , Sotheby’s Global Head of Books & Manuscripts, said in a news release.

For Annie was one of Poe’s most important compositions, and was addressed to Nancy “Annie” L. Richmond, one of the several women Poe pursued after his wife Viriginia’s death from tuberculosis in 1847.

In a letter to Richmond herself, Poe proclaimed For Annie was his best work: “I think the lines For Annie much the best I have ever written.”

The poem was composed in 1849, only months before Poe’s death, Sotheby’s said in the piece, Poe highlights the romantic comfort he feels from a woman named Annie while simultaneously grappling with the darkness of death, with lines like “And the fever called ‘living’ is conquered at last.”

Poe Cottage, preserved and overseen by the Bronx County Historical Society, is home to many of the author’s famous works, including Eureka, 1948, and Annabel Lee,, 1927.
Matthew Borowick for Sotheby’s

In the margins of the manuscript are the original handwritten instructions by Nathaniel P. Willis, co-editor of the New York Home Journal, where Poe published other poems such as The Raven and submitted For Annie on April 20, 1849.

Willis added Poe’s name in the top right and instructions about printing and presenting the poem on the side. The poem was also published in the Boston Weekly that same month.

Another piece of literary history included in the Swantko sale could surpass US$1 million. Conan Doyle’s autographed manuscript of the Sherlock Holmes tale The Sign of Four , 1889, is estimated to achieve between US$800,000 and US$1.2 million.

Bitcoin Price Drops After China Intensifies Crypto Crackdown

Authorities order Ant Group and state banks to root out cryptocurrency-related activities,