In March 2018, Dr Lerong Lu published an article “Bitcoin: Speculative Bubble, Financial Risk and Regulatory Response” in Journal of International Banking and Financial Law (2018), Vol. 33(3), pp. 178-182.
Abstract: In this article, the author tracks developments in bitcoin trading and considers regulatory responses. 2017 has witnessed a so-called bitcoin bubble, as entrepreneurs and professional investors rushed into the market to take a bet on the upcoming cryptocurrency age. The price of a bitcoin exceeded $19,300 in December 2017, worth only $0.06 in July 2010. The popularity of bitcoin mining and trading activities has raised legal and regulatory concerns pertaining to anti-money laundering, evasion of forex regulations, the illegal fundraising of start-ups by Initial Coin Offerings (ICOs), as well as a potential financial crisis. Global financial regulators have acted proactively to regulate bitcoin. Most recently, China, once accounting for 90% of bitcoin trading volume, issued an immediate ban of ICOs and ordered the reorganisation of three major bitcoin exchanges: OKCoin, Huobi and BTCC. Over-The-Counter (OTC) transactions have not been affected.Financial authorities in certain countries have been testing state-backed cryptocurrencies.
Keywords: bitcoin, cryptocurrency, financial bubble, financial regulation, initial coin offering