Crypto service providers and cryptocurrency exchanges are hurrying to break off ties with Chinese clients; in the wake of Beijing banning all crypto-transactions and mining completely, in a decisive move last week.
Although officially banned since 2019, Crypto-trading has remained operational in China virtually via foreign exchanges. However, this year the government began a series of significant crackdowns, ultimately building up to this decision. In a decision jointly taken by 10 prominent government bodies, overseas exchanges have been prohibited from serving the mainland investors through Internet; a previously ambiguous area. According to a prominent crypto leader, this definitive, unambiguous move has effectively left no room for speculation.
Over the past several years, China has made efforts to wipe out this industry several times, albeit without much success. This is because all their past decisions have always left open room for speculation and discussion.
In the wake of this decision, two of the largest exchanges worldwide, Huobi Global and Binance have caused one of the biggest upsets. Highly sought after by Chinese users, these exchanges have ceased new registrations of mainland customer accounts. Additionally, Huobi has also mentioned that it would terminate the existing accounts by the year-end.
The Chinese ban is bound to have a global impact since China is among the largest cryptocurrency markets worldwide. On Friday, The price of Bitcoin fell by a significant amount, though it improved over the weekend. Shares in several prominent crypto-related firms have significantly plummeted, with Huobi Tech (a crypto asset manager and trading firm)plunging as low as 23 per cent; and OKCoin founder Xu Mingxing’s primarily owned fintech company OKG Technology Holdings Ltd., losing 12 per cent.
An in-demand provider of crypto wallets, TokenPocket, has also declared that it would stop providing services to mainland clients.
Some CEOs believe that amidst the crackdowns this year, several Chinese companies have been shifting out of China; hence this recent policy would have limited effect. For instance, not long ago, Cobo, a platform managing crypto assets moved headquarters to Singapore. Additionally, this month The Chinese provider of Crypto financial services has established new business headquarters in Singapore.
