Crypto companies are halting their operation for Chinese mainland clients following the recent announcement by the People’s Bank of China (PBOC) that puts a blanket on crypto-related transactions and off-shore exchanges.
Last Friday, September 24, the PBOC posted a Q&A to the central bank’s website which declares virtual currency exchanges offering services to domestic residents are illegal. In short, China outlawed all cryptocurrency transactions and issued a national ban on crypto mining.
Following the announcement, many crypto-related companies are now terminating their services for Chinese users. Huobi Global was the first exchange to announce that it was wrapping up to abandon Chinese operations. Huobi, on Sunday, September 26, said that it had stopped accepting new Chinese users since September 24 and would gradually remove all Chinese users from its platform by the end of 2021.
The announcement reads:
“To comply with local laws and regulations, Huobi Global has ceased account registration for new users in Mainland China, effective September 24, 2021 (UTC+8).
Huobi Global will gradually retire existing Mainland China user accounts by 24:00 (UTC+8) on Dec 31, 2021.”
The move was followed by Binance that said that it had blocked account registrations using Chinese mobile phone numbers and its app was also no longer available for download in China. Binance, the crypto exchange that is currently under scrutiny from regulators around the world, has already been blocked in China since 2017.
Furthermore, the exchange has also stopped some of its services including fiat deposit services, spot trading of cryptocurrencies, the purchase of cryptocurrencies through fiat channels, and liquid swap in Singapore.
At that time, China shut down all local cryptocurrency exchanges and banned ICOs, but loopholes have remained that allowed mainland Chinese traders to buy and sell digital currencies on these offshore exchanges.
But these are not only the exchanges that are departing from China. According to some sources, popular market data trackers CoinMarketCap and GoinGecko have blocked Chinese IP addresses, and now require a VPN to access.
A widely used crypto wallet TokenPocket has also announced that it would terminate services to users in mainland China to comply with Chinese regulations.
Chinese regulatory FUD always had a bearish effect on the market in the past but this time, it has a little effect as Bitcoin is still trading above $40,000. Many see this as good news for the industry as it would free the crypto market from China-effect and an opportunity for the US to lead the crypto space.