Bitcoin exchange BTC China Raises $5m from Lightspeed
China’s largest bitcoin exchange by trading volume, BTC China, has raised $5 million in Series A funding from Lightspeed China Partners and Lightspeed Venture Partners.
The trading platform allows users to buy and sell the decentralized digital currency with renminbi, and to store the bitcoins on the platform for safekeeping.
It recently surpassed Mt Gox to become the world's largest BTC exchange by trading volume, with over 100,000 bitcoins in daily trading volume and more than RMB460 million in daily transactions. There are currently more than 12 million bitcoins in existence, and their value has more than trebled since October.
Most bitcoin trading platforms charge a percentage fee as trading commission, but BTC China has waived this since September.
Jeremy Liew, partner at Lightspeed Venture Partners, said in a statement that a large driver of the rise in the value of the bitcoin has been growing demand for it in China. ‘The opportunity for innovation that Bitcoin will enable in China is truly enormous, given the scale and growth of e-commerce, remittance, microtransactions and payments in that country," he added.
BTC China is the country's oldest exchange - it was founded in June 2011. The funding will be used to expand products and security as well as hiring.
Bitcoins provide a payment method that circumvents costly bank fees when making online payments across international borders, and find use in places where it is challenging to exchange local currency into US dollars.
China's capital controls make it difficult to buy online from outside the country, since most online stores don't accept renminbi or Chinese payment systems, and there are limits on exchange into foreign currency.
More Chinese online companies are accepting bitcoins, including Baidu, which now accepts the virtual currency as a payment method for Jiasule, its online security and firewall service.
However, use of bitcoins has come under scrutiny after its use to trade drugs and other illegal goods on parts of the dark web. The US Senate's Homeland Security and Governmental Affairs Committee is currently exploring the "promises and risks" of bitcoin for "government and society at large."
Meanwhile, the two biggest exchanges - BTC China and Japan-based Mt Gox - have grown in Asia and Singapore-based start-up trading platform itBit does not offer the service to US investors.
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