China begins crackdown on bitcoin mining, illegal trading activities

China announced that it will clamp down on bitcoin mining and trading to fend off financial risks, sharply pulling down bitcoin prices and putting it on course for weekly losses of over 15 percent.

The country also vowed to crack down on illegal activities in the securities market and to maintain the stability of stock, bond, and forex markets.

The statement by the State Council's Financial Stability and Development Committee comes days after three Chinese industry bodies tightened the implementation of a crypto-related services ban on banks and payment companies.

It was the first time the state council explicitly targeted crypto mining.

Hong Kong had earlier proposed that cryptocurrency exchanges be licensed and services provided only to professional investors.

Jehan Chu, the managing partner at Hong Kong blockchain venture capital firm Kenetic Capital, sees the overly restrictive policies resulting in a stifled opportunity and the industry's flight away from Asia.

Virtual currency mining in China is estimated to account for as much as 70 percent of the world's crypto supply.

Consequently, China's crackdown on mining is seen by Winston Ma, NYU Law School adjunct professor and author of the book "The Digital War," as having profound implications for global crypto markets.

While China has banned crypto exchanges and initial coin offerings, it has not barred individuals from holding cryptocurrencies.