Mark Weaden
A variety of major crypto exchanges are looking to cut ties with China users as the ban comes into full effect
Major players in the cryptocurrency exchange industry are looking to cut ties with China-based customers, amidst China banning cryptocurrencies. We’ve seen China make threats in the past, but it now seems that the Far East nation is following through this time.
We have heard from two crypto exchange giants in the form of Huobi and Binance, who are halting new registrations and looking to retire the accounts of existing Chinese users. The companies have stopped traders from signing up with phone numbers registered in mainland China. While this is the case for mainland China, Hong Kong-based users will still have access to both exchanges.
What this means for cryptocurrency, in the long run, is still uncertain. What we have seen already is the ban having a significant effect on the market, with Ethereum and Bitcoin dropping as low as they’ve been in some time.
Looking forward to Cryptocurrency in China
On Friday last week, we saw the People’s Bank of China and nine other institutions agreed that crypto-related transactions should be made illegal. While this is something that has been in the pipeline for a long time, China has only threatened crypto companies with action, until now.
Despite the ban, a Chinese crypto trading platform called OKEx is still operating in China. There is a fear that users operating and storing funds on OKEx may lose funds as a result of the government crackdown. This isn’t the case for industry leaders Binance, who have been going through a series of steps to increase their compliance and regulatory standards on a global scale.
A few of the major crypto exchanges have come under scrutiny from governments and global regulators in recent months, so it’s not surprising for them to act quickly and declare their position publicly.
There are many in the industry who claim the ban is to ensure the success of the nation’s own cryptocurrency known as the digital yuan. The process hasn’t been easy for the Chinese government as the yuan contradicts the very premise of decentralized finance (DeFi) currencies like Bitcoin.
Another issue for China has been banning offshore exchanges. Many of these exchanges target Chinese customers and the appeal of DeFi is extremely appealing, offering a means to manage money away from the ever-watchful eye of the People’s Republic of China. We expect this story to develop more in the coming weeks, as we learn more about the fallout from the ban.
