While China seems to be working non-stop to banish crypto, the country’s virtual currency traders are working just as hard to continue being a part of this financial revolution.
Since its ICO ban almost a year ago, China has continued its crypto clampdown. Just last month, the country turned its eye to WeChat and subsequently removed accounts that provided any type of industry news and information.
While it does appear as though the end goal is to eradicate cryptocurrencies, South China Morning Post reports that this probably won’t happen. This won’t stop Chinese authorities from trying though. In fact, a report by the Shanghai Securities Times states that these authorities blocked access to 124 offshore crypto-exchanges that service traders in the country.
Traders in China are Working Hard
However, where there’s a will, there’s a way. Some Chinese exchanges moved their servers out of the country and even registered their businesses abroad, but this doesn’t mean that they’re safe. Terence Tsang, who is the chief operating officer of TideBit, said:
The latest warning and potentially increased monitoring of foreign platforms is targeted at a batch of smaller exchanges that had claimed to be foreign entities, but are in fact operating in China claiming they have outsourced their operations to a Chinese company. Those exchanges whose website landing pages are in Chinese have drawn particular scrutiny by regulators.
The thing is, because the industry is decentralized and based on a peer-to-peer system, keeping a close eye on it can be tricky. This is especially true for servers based outside of the country. For traders, the circumventing trading process is full of dips and dives including first converting yuan to tether, which can then be traded on an exchange for any other crypto of their choosing.
Of course, with strict regulations in place, Chinese traders rely on virtual private networks (VPNs) to make the process work. However, according to sources, this could come to an eventual end:
Chinese regulators definitely have the technical ability to shut down VPNs. However, traditionally it takes numerous conversations with different stakeholders to reach a consensus on configuring a firewall, which lengthens the process.
Success Seems Dubious
The report by the Shanghai Securities Times seemed to have affected trading numbers. A week before it came out, combined numbers for seven exchanges popular with Chinese traders was about $3.73 billion. Post report saw that amount drop to $2.5 billion.
This same report mentioned that authorities are collaborating with third-party payment operators to stop crypto-related transactions. However, platforms like Tencent, owner of WeChat and Alibaba, are unsure if this bid will be successful.
While the eyes of regulators are trained on cryptocurrencies, the country’s coffers have no problem investing in blockchain technology. Perhaps China will take a page out of India’s book and possibly relook at their ban and overall attitude towards virtual currencies. Enthusiasts are going to find a way regardless so maybe China should rather ensure that its citizens have a safe space to trade.
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