It’s been a bad end of 2013 for the virtual currency Bitcoins.
Prices for Bittcoins plunged against the yuan and the dollar after China’s largest online market stopped accepting Bitcoin deposits. Meanwhile, Danish officials said they plan to adopt regulations for trading the currency and in India, the country’s largest Bitcoin exchange closed up shop.
Bitcoin fell as much as 49 percent to 2,011 yuan—$331—on BTC China, which said its payments subsidiary YeePay would no longer offer deposit services, according to published reports.
Bitcoin declined as much as 43 percent against the U.S. dollar on the Bitstamp, an online market where the digital money can be traded for legal tender.
Bitcoins are not regulated by any country or banking system and have raised concerns they would be the perfect currency for illegal transactions. There growing use, however, triggered a huge spike in their value in 2013.
Many countries, however, are beginning to look at regulating virtual currency.
Norway said this month it won’t recognize Bitcoins as legal tender and will impose a capital gains tax. China’s central bank has moved to bar financial institutions and payment companies from handling Bitcoin transactions.
The U.S. Treasury Department’s Financial Crimes Enforcement Network has also said that Bitcoin businesses may be considered money transmitters for the purpose of complying with anti-money laundering laws.
The virtual currency, however, gained credibility after law enforcement and securities agencies said in U.S. Senate hearings that Bitcoin could be a legitimate means of exchange.
The price of Bitcoins then topped $1,000, but has since dropped to about $550.
Denmark announced it will prepare standards on virtual currency to protect consumers. The country hopes to align with other nations in designing a framework that deals with the use of Bitcoins and its competitors, according to published reports.
Also, the European Banking Authority has issued a warning about the dangers of dealing with virtual currency, especially Bitcoins. The EBA says that platforms for exchanging Bitcoins for real money are not guaranteed against any losses that might be incurred, and also, since the currency is digital, it can be stolen by computer hackers.
Finally, India’s biggest Bitcoin trading platform, BuySellBitCo.in, has suspended its operations, citing a recent Reserve Bank of India public advisory that highlighted the risks involved in dealing with virtual currencies. According to Indian media, this set off a sell off of Bitcoins on several Asian platforms.
The central bank issued a notice warning the public that virtual currencies could be used for money laundering and funding anti-terrorism activities. It stopped short, however, of issuing a ban or any other restrictions.
