BTCChina, the country's biggest bitcoin trading platform, announced on Tuesday that the company will stop all trading from September 30, 2017, according to a statement.

"The decision was based on policies issued on Sept 4 by the People's Bank of China and relevant regulators over the risk of fundraising through issuing digital coins," said the statement.

Earlier this month, China ordered a ban on Initial Coin Offerings, a nascent form of fundraising in which technology start-ups issue their own digital coins, or "tokens", to investors to access funds as the rapidly expanding market spawned concerns over financial risks.

Prices of bitcoin plummeted after the announcement, according to a report by The Paper.

Bitcoin on Huobi, another major Bitcoin trading platform in China, was quoted at 21,100 yuan, down about 15 percent. On BTCChina, the quotation dropped over 20 percent to 19,100 yuan.

Financial regulators in Shanghai have instructed all trading platforms to halt all bitcoin transactions before the end of September, however Beijing-based Huobi said the company has not yet received such a notice from the regulator, said the report.