In recent developments that have sent ripples across the cryptocurrency market, major Chinese Bitcoin exchanges have resumed withdrawal services after a four-month regulatory review period. This pivotal shift has coincided with a significant 25% surge in Bitcoin’s price, signaling renewed investor confidence and market liquidity. The move follows extensive upgrades to anti-money laundering (AML) systems across platforms and anticipates the imminent release of formal regulatory guidelines from the central bank.
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Regulatory Oversight Drives Platform Upgrades
Starting May 31, three leading domestic Bitcoin trading platforms — Huobi, OKCoin Bidaxing (now part of OKX), and BTC China — announced the gradual resumption of Bitcoin withdrawal services. This marked a turning point for China’s crypto market, which had been under intense scrutiny since early 2025, when the People’s Bank of China (PBOC) launched inspections into major exchanges.
The temporary suspension of withdrawals began on February 9 as part of broader compliance measures. During this period, exchanges underwent rigorous evaluations focused on user verification, transaction monitoring, and AML framework enhancements.
According to industry insiders, the restoration of withdrawal functionality reflects the successful alignment of these platforms with regulatory expectations. Exchanges have implemented stricter Know Your Customer (KYC) protocols, improved real-time transaction tracking, and strengthened data retention policies — all critical components in mitigating financial crime risks.
Enhanced Anti-Money Laundering Measures Across Major Platforms
Each platform has rolled out comprehensive AML upgrades tailored to meet evolving regulatory standards.
Huobi has enhanced its identity verification process by integrating real-time validation with national ID databases. In addition to collecting standard personal information such as name, gender, occupation, and ID number, the platform now requires users to submit updated photos of their identification documents and perform video-based authentication before initiating any withdrawal. This ensures ongoing compliance even as identification documents expire.
Furthermore, Huobi is actively working to re-verify legacy accounts to ensure full KYC coverage across its entire user base. The platform has also introduced a formal blacklist system and established standardized reporting procedures for suspicious transactions — all records of which are permanently archived for audit purposes.
Meanwhile, OKCoin Bidaxing, though still in the trial phase for withdrawals, has implemented robust compliance mechanisms. Users must provide verified personal details including full name, ID number, and mobile phone number, which are cross-referenced with official citizen information databases. For users who have cumulatively deposited over 100,000 RMB in fiat currency, mandatory video verification is required.
The platform also conducts proactive screening of high-risk accounts, requesting additional documentation such as proof of residence, source of funds, and asset statements when anomalies are detected.
BTC China similarly emphasized its commitment to risk control, stating that withdrawals would only be reinstated after passing a newly developed risk management system audit — underscoring the seriousness with which platforms are approaching compliance.
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Market Reacts Positively to Increased Liquidity
The resumption of withdrawals has injected much-needed liquidity into the market. Analysts note that restricted access to funds during the suspension period led to suppressed trading volumes and increased volatility.
Zhang Jun, senior researcher at Taiyi Cloud Strategic Research Institute, explained: “Restoring withdrawal capabilities allows for greater market fluidity. In the short term, we’re seeing a rebalancing phase where holders adjust their positions. Over the medium to long term, clearer regulations will foster a more stable and trustworthy environment.”
Despite the optimism, technical challenges remain. Some users reported delays in transaction confirmations within hours of the service restart — an issue attributed to network congestion on the Bitcoin blockchain itself. While exchange-level operations have normalized, underlying scalability constraints continue to affect user experience during peak activity periods.
Still, market sentiment remains bullish. Following the announcement, Bitcoin prices climbed rapidly from around 14,400 RMB to nearly 18,000 RMB — a gain of over 25% in just several days.
Upcoming Regulatory Framework to Formalize Oversight
According to multiple sources familiar with regulatory discussions, the PBOC is finalizing two key policy documents expected to be released imminently:
- A management regulation for Bitcoin trading platforms
- A dedicated anti-money laundering guideline for digital asset exchanges
These regulations aim to formalize operational standards, enhance consumer protection, and integrate crypto platforms into the broader financial oversight ecosystem.
Deng Di,理事长 of the China Blockchain Research Center, noted that regulators are balancing caution with innovation: “Authorities are naturally concerned about uncontrollable factors — Bitcoin’s anonymity, global transferability, and price sensitivity to external events. But there's also recognition that emerging technologies deserve room to evolve under responsible supervision.”
Legal expert Deng Jianpeng, vice president and secretary-general of the China Fintech Law Association, recommended several forward-looking approaches:
- Segregation of customer assets from platform funds to prevent misuse or fraud
- Adoption of escrow-like mechanisms through third-party custodians for digital assets
- Implementation of bank custody models for fiat deposits
- Exploration of regulatory sandboxes, inspired by the UK model, to test innovative services under controlled conditions
Such measures could lay the foundation for a compliant, transparent, and resilient digital asset market in China.
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Frequently Asked Questions (FAQ)
Q: Why did Chinese Bitcoin exchanges suspend withdrawals earlier in 2025?
A: Withdrawals were temporarily halted following central bank inspections aimed at ensuring compliance with anti-money laundering regulations and strengthening platform risk controls.
Q: Has the Chinese government officially approved Bitcoin trading?
A: While Bitcoin trading is not illegal per se, it remains tightly regulated. Exchanges must adhere to strict KYC/AML rules and operate within defined legal boundaries without promoting speculative behavior.
Q: What impact did the withdrawal resumption have on Bitcoin’s price?
A: The return of withdrawal functionality restored market confidence and liquidity, contributing to a 25% price increase within days as traders regained access to their holdings.
Q: Are Chinese crypto exchanges now fully compliant with regulations?
A: Major platforms like Huobi and OKCoin have significantly upgraded their compliance infrastructure and are operating under enhanced supervision ahead of formal rule implementation.
Q: Will individual investors face stricter verification processes?
A: Yes. All users must now undergo rigorous identity verification, including document submission and video authentication, especially for large transactions or withdrawals.
Q: What role does the PBOC play in regulating cryptocurrency?
A: The People’s Bank of China oversees systemic financial risks related to digital assets, enforces AML standards, and is developing a structured regulatory framework for exchange operations and investor protection.