China's underground crypto market thrives despite harsh trading ban: WSJ

cyptouser9 months agoCryptocurrencies News144

Despite Beijing’s 2021 ban on crypto trading, a thriving underground market reportedly continues to operate in China. The Wall Street Journal (WSJ) reported that investors circumvent the country’s stringent regulations through informal networks through VPNs, social media, and physical trading.

China is one of the world’s most stringent regions for crypto trading. Authorities actively pursue those involved in the sector, resulting in detentions, fines, and imprisonment. However, according to the WSJ, this has not deterred some Chinese traders. Further, in an exclusive interview, Bitfarms’ Chief Mining Officer, Ben Gagnon, identified a silent return to crypto mining in the region through energy capture technology in residential housing.

The Journal cited Chainalysis data from an October report, showcasing that from July 2022 to June 2023, Chinese traders received a net of $86 billion from crypto transactions. Their trading volume on Binance reportedly reached approximately $90 billion monthly.

Some Chinese traders purportedly maintained access to accounts on foreign crypto exchanges established before the ban, using virtual private networks (VPNs) to mask their locations and allowing them to bypass geo-restrictions. Further, the Journal stated that traders in China also use social media platforms like WeChat and Telegram to engage in crypto trading, assumingly peer-to-peer. They find buyers and sellers through dedicated groups on these platforms, bypassing the need for traditional exchanges.

Physical trades are also reportedly common, particularly in inland cities like Chengdu and Yunnan. Here, enforcement is laxer, and the Journal reports that traders often meet in public spaces like cafes or laundromats to exchange crypto wallet addresses or conduct transactions through cash or bank transfers.

Despite being a former crypto trading and mining hub, China’s stance on crypto remains rigid. The country has advocated using blockchain for applications like digital identities, tracking livestock, and authenticating luxury products. However, unlike decentralized ledgers typical of web3, China insists on using private blockchains for the most part.

Despite bans, crypto trading persists in China, a testament to its decentralized and global nature and highlighting real-world examples of how hard it is for governments to control blockchain-based digital assets. Nonetheless, China continues to attempt to clamp down on crypto usage.

Author

Liam 'Akiba' Wright

Senior Editor at CyptoRanking

Also known as "Akiba," Liam is a reporter, editor and podcast producer at CyptoRanking. He believes that decentralized technology has the potential to make widespread positive change.

@akibablade LinkedIn Email Liam Editor

News Desk

Editor at CyptoRanking

CyptoRanking is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI.

@cryptoslate LinkedIn Email Editor Latest Report

Bitcoin ETFs: An in-depth look at the first 5 days of trading

We explore the first 5 days of Bitcoin ETF trading, analyzing their inflows and implications on the broader market.

Andjela Radmilac · 2 days ago
The content on this website comes from the Internet. Due to the inconvenience of proofreading the authenticity and accuracy of the copyright or content of some content, it may be temporarily impossible to confirm the authenticity and accuracy of the copyright or content. For copyright issues or other issues caused by this, please Call or email this site. It will be deleted or changed immediately after verification.

related articles

Hong Kong regulator fast-tracks Bitcoin spot ETF approvals

1205f261˃The Securities Regulatory Commission of Hong Kong (SFC) has reportedly expedited the approv...

Bulgarian authorities drop money laundering investigation into Nexo executives

Sofia City Prosecutor’s Office has concluded a high-profile investigation into the activities...

Vitalik Buterin says crypto regulations have created ‘anarcho-tyranny’

Vitalik Buterin says crypto regulations have created ‘anarcho-tyranny’

55966e89˃Ethereum’s outspoken co-founder, Vitalik Buterin, recently expressed his frustration over t...

Ferrari announces its embracing crypto payments amid market demands

Joining the growing list of companies accepting cryptocurrency, renowned luxury sports car manufactu...

Nigerian fintechs crack down on crypto, users face account blocks

Nigerian fintechs crack down on crypto, users face account blocks

55966e89˃Some Nigerian fintech platforms have warned users against connecting their platforms with c...

21Shares debuts Toncoin staking ETP TONN on SIX Exchange

21Shares debuts Toncoin staking ETP TONN on SIX Exchange

25cc9d4a˃21Shares, one of the largest cryptocurrency exchange-traded product (ETP) issuers, is launc...