Bitcoin price slips as China steps up regulation

The price of bitcoin lost 14 percent over the weekend as one the largest bitcoin exchanges in the world confirmed that transactions have been affected by a clampdown from the Chinese government.

BTC China - in the top five of the most commonly used bitcoin exchanges, according to - said over the weekend that it had suspended yuan deposits from the China Merchant Bank, following guidance the bank had posted on its website. CEO of BTC China Bobby Lee confirmed to CNBC that the exchange had also received a telephone call from the bank Monday, formally directing the exchange to cease transactions from its account.

BTC China tweet

Lee said that the bank had indicated the guidance came from "their superiors in the Beijing main office after a directive from the central bank." Lee added that all other withdrawals from other Chinese banks were as normal.

Read More Bitcoin defies talk of China crackdown

The often volatile price of the virtual currency took another hit on the news, with the price of one bitcoin falling to $424 by Monday morning, according to industry website CoinDesk, a fall of around 14 percent from Friday's price.

George Frey | Getty Images

BTC China's announcement adds to the growing uncertainty regarding regulation in China. Local media had reported that April 15 was a possible deadline set by the People's Bank of China (PBoC) for Chinese banks to freeze the accounts of bitcoin exchanges. Exchanges BTC Trade and both signaled earlier in the month that their banks had closed their accounts on, or close to, this deadline.

This speculation regarding regulation begun in early December 2013, after a price surge in bitcoin which many attributed to growing enthusiasm from Chinese investors. A statement released by the PBoC on December 5 warned of the risks associated with bitcoin, saying that Chinese financial institutions should not trade the digital currency.

Read MoreBitcoin stumbles on fears of China clampdown

Last month, a report by Chinese news site Caixin stated that the PBoC had introduced measures which would target 15 bitcoin-trading websites, adding that banks - who have these companies as clients - would be punished if they failed to close their accounts by the April deadline.

The PBoC moved quickly to deny these reports but these announcements by the exchanges would now appear to contradict that. What's more, BTC China's new announcement means that no exchange is immune to the clampdown with the company being the last exchange to be notified.

Lee iterated to CNBC that the only formal guideline on bitcoin by Chinese authorities was still the communication on December 5. "It has not shown any new guidance," he said, but added that he would take appropriate steps if it did issue an official statement but could not predict what the next step by the PBoC would be.