While China’s stance on cryptocurrencies remains unmoved, with a complete ban implemented by the People’s Bank of China in September 2021, interesting observations suggest a different scenario on-the-ground. Notably, the world’s largest crypto exchange, Binance, seems to have inadvertently turned China, a crypto-hostile nation, into its largest market. As per a Wall Street Journal (WSJ) report, Chinese traders have facilitated crypto trades worth a staggering $90 billion in just one month of this year, which means one-fifth of Binance’s total global volume!
Sounds paradoxical, right? Well, Binance, whose website can’t be accessed by users within China’s borders, is apparently being browsed by Chinese natives via ‘Virtual Private Networks’ (VPNs). VPNs are enabling these users to dodge censorship, enabling them to seemingly exist outside Chinese territory in the digital sphere.
The intriguing picture doesn’t end there. When probed by the WSJ about the surge in trading volume from China, a Binance representative remained tight-lipped, merely confirming that their website cannot be accessed by users based out of China.
Adding more complexity to the unfolding scene, the WSJ claims that China houses over 900,000 active Binance users. Is that a matter of concern? Not really- unless we consider that Binance’s user count in China is rapidly progressing despite a complete clampdown on crypto trading!
This seeming victory might turn into a double-edged sword as Binance’s presence in China faces the US’s growing regulatory scrutiny. Binance and its CEO, Changpeng Zhao, were slapped with a lawsuit by the US Securities and Exchange Commission (SEC) in June for nonchalance towards federal security laws.
Unfolding developments in the US raise questions about whether Binance might actually prefer a foothold in a country where cryptocurrencies remain under the hammer. Any direct answer is on pause, but Binance’s past tells us that it moved its headquarters out of China when a crackdown on the crypto industry began in 2017. But what’s equally surprising is reports of a few staff members continuing to operate from China.
The question remains – will China emerge as a crypto-friendly state eventually, considering this unexpected boom in crypto trading despite government restrictions? Or is it simply a ‘virtual’ mirage that will fade away when the Chinese government fortifies its anti-crypto armor? Only time will unfold this crypto mystery. The interplay between regulation, evasion and technological workaround certainly makes for a fascinating dichotomy.
Source: Cryptonews
