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Marathon Digital and other crypto-linked stocks drop after China declares cryptocurrency transactions illegal

Business Insider logo Business Insider 9/24/2021 insider@insider.com (Carla Mozée)
Bitcoin Dan Kitwood/ Getty Images © Dan Kitwood/ Getty Images Bitcoin Dan Kitwood/ Getty Images
  • Bitcoin miners Marathon Digital and Riot Blockchain fell Friday after China declared crypto-related transactions illegal.
  • China said virtual currencies don't have the same legal standing as fiat currency.
  • Bit Digital and Coinbase were other crypto-linked stocks that lost ground.
  • See more stories on Insider's business page.

Shares of bitcoin miners and other stocks tied to the cryptocurrency space slid Friday after China said all crypto-related transactions are illegal, with the country's continued crackdown on digital assets also driving down bitcoin's price.

Bitcoin and ether "are not legal and should not and cannot be used as currency in the market," the People's Bank of China said, according to a translated version of its statement. The central bank said virtual currencies don't have the same legal standing as fiat currency because they're issued by non-monetary authorities and use encryption technology, it said.

Buying and selling virtual currencies as a central counterparty and providing pricing services are among the activities the PBOC said are against the law. It also said overseas, online virtual currency exchanges providing services to Chinese residents are conducting business illegally.


Video: Bitcoin drops after China says crypto-related activities are illegal (CNBC)

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In US trade, shares of Marathon Digital, a bitcoin miner valued at around $3.6 billion, fell 7% premarket and lost as much as 8.4% when they hit $34.53. Bitcoin miners Riot Blockchain and Bit Digital slumped 7% and 7.9%, respectively.

Meanwhile, shares of Coinbase, the largest cryptocurrency exchange in the US, declined by 3.7%, and crypto seller Robinhood shed 2.7%. MicroStrategy, the business enterprise software maker which makes large purchases of bitcoin, lost 5.6%.

Beijing has been steadily tightening the screws on cryptocurrency operators, weighing on prices for digital coins. China previously ordered bitcoin miners operating in the country to shut down, citing environmental concerns. It has also raised concerns about digital assets being used in financial crimes.

Bitcoin, the world's most traded cryptocurrency, gave up 7.9% Friday to trade at $41,353, and ether, the token of the ethereum blockchain, sank 10% to $2,823.

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