Bitcoin is dropping right now after a big Chinese exchange said it is closing

Tomohiro Ohsumi | Bloomberg | Getty Images

An employee uses a smartphone during a demonstration of purchasing bitcoin from a bitcoin automated teller machine in Tokyo, Japan.

Bitcoin prices fell about 7 percent on Thursday after one of the biggest exchanges in China said it will shut down its operation.

The cryptocurrency traded at $3,601.40 at 7:58 a.m. in New York, far below an all-time high of $5,013.91 set earlier this month.

BTC China said in a tweet Thursday it will close down its operations by Sept. 30 as Chinese authorities crack down on cryptocurrencies.

TWEET: 1/ After carefully considering the announcement published by Chinese regulators on 09/04, BTCChina Exchange will stop all trading on 09/30.

China is tightening its grip on the burgeoning currency. On Sept. 4, Chinese media outlet Caixin reported that regulators banned companies from raising money through initial coin offerings (ICOs), referring to them as an unauthorized fundraising tool that may involve financial scams.

Since then, bitcoin has lost more than 20 percent of its value.

Bitcoin since Sept. 4

Source: Coindesk

—Saheli Roy Choudhury contributed to this report.