Authorities in China reinforced their crackdown against Bitcoin trading activity and crypto mining Friday, saying tighter regulations are needed to protect the country’s financial system and threatening punishment for violators. The price of Bitcoin plunged more than 6 percent in the wake of the statement. The digital currency has fallen more than 40 percent from its April 19 peak and was trading at $36,579.84 as of this writing.

“It is necessary to maintain the smooth operation of the stock, debt, and foreign exchange markets, severely crack down on illegal securities activities, and severely punish illegal financial activities,” the Chinese government said in a statement. “It is necessary to strictly guard against external risk shocks, effectively respond to imported inflation, strengthen anticipation management, strengthen market supervision, and prepare response plans and policy reserves.”

China’s tough talk comes just a day after U.S. officials promised to get tough on Americans using Bitcoin to engage in “illegal activity broadly including tax evasion,” CNBC reported. The U.S. Treasury Department said taxpayers must begin in 2023 to report crypto transfers of more than $10,000, similar to how cash transfers are policed.

Cryptocurrency trading has been illegal in China since 2019 in an effort to curb money laundering. But people were still able to trade in currencies such as Bitcoin online, which has concerned Beijing, BBC reported. The price of Bitcoin fell below $34,000 for the first time in three months on Wednesday after China imposed new limits on cryptocurrencies. Chinese banks and payment firms were banned from providing services related to crypto transactions. China also warned investors against speculative crypto trading on Tuesday.

Bitcoin’s price slump in the last 24 hours wasn’t as severe as other cryptocurrencies.

China plans to crack down on illegal crypto activities in the securities market and maintain the stability of stock, bond and forex markets, the State Council’s Financial Stability and Development Committee said on Friday in a meeting chaired by Vice Premier Liu He. Liu is the most senior Chinese official to publicly order a crackdown on Bitcoin, and it’s the first time the state council has explicitly targeted crypto mining activities in a sharp escalation against virtual currencies, Reuters reported.

The statement came days after three Chinese industry bodies tightened a ban on banks and payment companies providing crypto-related services.

China accounts for most of the Bitcoin mining in the world. Five of the six mining pools that perform more than 80 percent of Bitcoin mining are located in China or managed by Chinese organizations, and this could threaten the world’s largest cryptocurrency, according to a new report by Princeton University researchers.

China’s crackdown on crypto mining “will have profound implications for global crypto markets,” said Winston Ma, NYU Law School adjunct professor and author of the book “The Digital War”.

Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?

“Bitcoin is no longer an investment tool to avoid risks. Rather, it’s a speculative instrument,” the Chinese broadcaster said, adding that the cryptocurrency is poorly regulated and often used in drug deals, gambling, smuggling, black market trade and money laundering.

China’s central bank was one of the first in the world to develop its own digital currency backed by the yuan.

PayPal co-founder Peter Thiel said that China is using bitcoin as a financial weapon to supplant the dollar. China prefers to have two reserve currencies that counter the dollar, Thiel said at the Richard Nixon Foundation seminar in April.

Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell have said that the U.S. is exploring creating a digital dollar.