>Because Bitcoin and ICO are the main mechanism to get money out of China

No bitcoin and ICO's are a mechanism to get money out of China. Shady HK pawn shops, "family" vacations with strangers (the limit on money moved is per person) and straight up smuggling in bodily crevices are still far more popular. Right now China makes more on bitcoin than it loses because 70% of mining happens in China. So long as this remains true China will not ban bitcoin. Everything else is just noise and FUD.

btw if you want to make real money, figure out how to help Chinese millionnaires move money out of China

That's crypto's primary use case already.

...until China bans bitcoin, which might happen soon, after the october national congress

I think China likes Bitcoin because money flowing into it does not strengthen the dollar thus putting pressure on their foreign reserves. If people are sneaking their money out of the country, they'd rather be trading it for Bitcoin than dollars.

Unless there is also lots of demand from bitcoin to RMB, if not then foreign reserves have to be tapped at some point.

The government doesn't care what the bitcoin/rmb exchange rate is because they don't buy oil or imports in bitcoin nor do they hold any bitcoin reserves.

I'm not disagreeing with that: Bitcoin isn't a sneaky way of doing forex unless the RMB used to buy bitcoin is being converted into dollars (or another convertible currency), which most definitely is cared about.

Mining operations can convert Chinese electricity into bitcoin.

So use RMB to purchase electricity for mining bitcoin, convert mined bitcoin to currency outside of China (or sell for RMB to someone that wants to do that and use RMB to buy electricity to mine more bitcoin).

Ya, ok. I can believe that, but it isn't very direct.

China does have cheaper electricity than the west, especially since most of it still comes from cheap dirty coal.

Aren't the bitcoin miners in China siphoning electricity off the grid for free?

If your using btc to launder money you're likely converting it to other stable currencies

Except if they leave the money in bitcoin they don't have to explain where they got it. If they turn it into a foreign currency they have to tell a bank where it came from. Come to think of it, that's probably where all the ICO demand is coming from. These guys have money stuck in crypto and are desperately looking for a way to invest it.

Exactly. The bitcoin millionaires have a lot of unrealized gains. That's where the term whale comes from.

If China could effectively ban bitcoin, they'd have done so long ago; they don't because they can't enforce it and they know it and it's better to look like you don't care that to show that you don't have the power.

China bans a great many things, even if those bans can be circumvented (access to certain political websites being a notable example).

Uhm, you are a bit late, there is already an entire industry devoted to just that primarily in HK but everywhere....

but why not ban it outright? why go through the routine of acting tough on bitcoin every time a bubble comes up?