Cryptocurrency exchanges scramble to drop Chinese users after Beijing ban

September 29, 2021

Beijing’s new blanket ban on all cryptocurrency trading and mining – the broadest yet by a major economy – has sent crypto exchanges and service providers scrambling to sever business ties with mainland Chinese clients. Industry executives noted, however, that many companies had already shifted key portions of their business outside China, according to Reuters.

Ten powerful Chinese government bodies said in a joint statement on Friday that overseas exchanges were barred from providing services to mainland investors via the internet – a previously grey area – and vowed to jointly root out “illegal” cryptocurrency activities. In response, Huobi Global and Binance, two of the largest exchanges globally and popular with Chinese users, stopped new registrations of accounts by mainland customers. Huobi also said it would clean up existing ones by the end of the year.

“On the very day we saw the notice, we started to take corrective measures,” Du Jun, Huobi Group co-founder said in a statement to Reuters. Du did not give an estimate of how many of its users would be affected, saying only that Huobi had embarked on a global expansion strategy many years ago and seen steady growth in Southeast Asia and Europe.

The ban, which comes amid a swath of regulatory actions that have hit a range of sectors from gaming to tech to for profit-tutoring, makes it very hard for Chinese mainland investors to buy or sell the assets unless they leave the country. It does not, however, go so far as to declare ownership of cryptocurrencies as illegal. In contrast, while elsewhere in the world cryptocurrency firms are facing increased oversight, outright bans are rare.

Amid the crackdown, other types of Chinese crypto companies have been moving out of China over the past few months, said Flex Yang, founder and CEO of Babel Finance, adding that the impact from the latest policy would be “limited”.

Copyright ©  2021 Reuters

Image credit PxHere

Share
Leave a Reply

Your email address will not be published. Required fields are marked *