Crypto users in Mainland China are still finding ways to trade while major exchanges are preparing to disable service for Chinese users by the end of the year.
As 2021 is coming to an end, it has been widely believed that time is running out for crypto users and investors based in China. Following a renewed ban earlier this year on everything from crypto trading to mining, exchanges that have historically had large numbers of Chinese users, including Binance and Huobi, said that service for these users will be disabled by the end of December.
The upcoming deadline has been highlighted by some as a potential risk for the market, with for instance the Chinese crypto-focused journalist Colin Wu writing that people should “be aware of market fluctuations” as Binance, Huobi and MEXC suspends support for Chinese users.
Despite the looming deadline, however, crypto users in Mainland China have already found ways to get around restrictions, according to unnamed sources the South China Morning Post spoke with.
According to one Chinese crypto investor, using a virtual private network (VPN) to bypass the ‘Great Firewall’ means users in China can still access foreign crypto exchanges. From there, the same source said it is possible to sign up using a foreign email service and choosing a country that does not have an identity system.
Meanwhile, according to another Chinese crypto investor who was also around during China’s previous crackdown on crypto in 2017, new solutions will most likely emerge for Chinese crypto traders.
Following the 2017 ban, many Chinese exchanges suspended deposits of Chinese yuan and only allowed withdrawals, the investor said, adding that this led to “temporary chaos” in the domestic market. However, the situation improved when some market veterans formed private over-the-counter (OTC) groups that could facilitate trading between fiat and crypto, the source explained.
According to a third source, however, options are becoming much more limited for those who are new to crypto.
Traders can always opt for decentralized exchanges (DEXes) which do not impose know-your-customer (KYC) checks to trade between tokens, but moving from Chinese yuan to crypto is becoming more difficult, the source was quoted as saying.
After China’s previous ban on crypto from 2017, many of the country’s largest exchanges responded by moving their headquarters out of the Chinese Mainland and to locations such as Hong Kong and Singapore.
However, peer-to-peer and OTC markets were still generally available to users in China, making it relatively hassle-free for these users to continue to participate in the crypto economy. With Beijing this time seemingly more determined to drive out crypto-related activities from the country, however, it is still an open question which solutions will emerge for Chinese crypto users this time.
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