Cryptocurrency Exchanges Rush To Cut Ties With Chinese Users After Further Crackdown

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By Samuel Shen and Andrew Galbraith

SHANGHAI (Reuters) – Cryptocurrency exchanges and crypto service providers scramble to sever trade ties with customers in mainland China, after Beijing last Friday issued a blanket ban on all crypto trading and mining .

After years of efforts to bring the sector under control, 10 powerful Chinese government agencies, including the central bank, have declared that overseas stock exchanges are prohibited from providing services to mainland investors via the Internet – a previously gray area – and have vowed to jointly root out “illegal cryptocurrency activities.”

Huobi Global and Binance, two of the world’s largest exchanges and popular with Chinese users, have stopped new account registrations by clients on the mainland. Huobi also said he would clean up existing ones by the end of the year.

“The same day we saw the notice, we started to take corrective action,” Du Jun, co-founder of the Huobi Group, said in a statement to Reuters.

Du did not give an estimate of how many of its users would be affected, saying only that Huobi, once the world’s largest crypto exchange, embarked on a strategy of global expansion many years ago and had experienced steady growth in Southeast Asia and Europe.

Shares of crypto-related companies fell on Monday, with crypto asset manager and trading firm Huobi Tech plunging 23% and OKG Technology Holdings Ltd, a fintech firm majority-owned by Xu Mingxing, founder of the OKcoin crypto exchange, losing 12%.

TokenPocket, a popular crypto wallet service provider, also said in a customer advisory that it would end services to mainland Chinese customers who risk violating Chinese policies and “actively adopt” the regulations. He added that he welcomed China’s cooperation in blockchain technologies.

Many Chinese crypto exchanges closed or moved overseas in 2017, after China, once the world’s largest center for bitcoin trading and mining, banned those platforms from converting legal tender into cryptocurrency. and vice versa. Then, in May this year, the Chinese State Council promised to ban bitcoin trading and mining.

Amid the crackdown, other types of Chinese crypto companies have left China in recent months, Flex Yang, founder and CEO of Babel Finance said, adding that the impact of the latest policy would be “limited.” .

The Chinese crypto financial services provider opened a new headquarters in Singapore this month.

Cobo, a crypto asset management and custody platform, also recently moved its headquarters from Beijing to Singapore.

(Reporting by Samuel Shen and Andrew Galbraith; editing by Edwina Gibbs)


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