Rules Are Meant To Be Broken?
To many in the crypto community, intense government intervention or regulation is not a problem, as a majority of nations across the globe are somewhat open to the use and propagation of crypto assets. However, as reported multiple times by Ethereum World News in the past few weeks, China-based regulators have been doing their utmost best to clamp down on the development, use, and trading of cryptocurrencies within the country’s borders.
Some of the measures the government took include, silencing crypto discussion on online forums, banning cryptocurrency-related events, restricting 124 foreign crypto exchanges, blocking access to eight crypto-centric news outlets on WeChat, and also banning Alipay accounts that have been suspected of facilitating crypto trades.
But as the old saying goes, “rules are meant to be broken.” Cryptocurrency firms and traders within the country have evidently taken this saying to heart, doing their best to skirt the bans by introducing ingenious solutions and workarounds.
As per a recent report from the South China Morning Post, despite Beijing’s attempt to shutter local exchanges, executives and employees within these firms have sought to avoid the ban by utilizing a series of domains to get their exchanges to the public via alternative means, albeit in less than ideal manner.
By moving their servers and legal operations outside of Chinese borders, these firms can essentially bypass a majority of the legal risks of propping up an exchange in China, which become classified foreign exchanges at that point. Speaking on the matter, Terence Tsang, the chief operating officer of TideBit, which maintains a series of crypto exchanges in Hong Kong and Taiwan, stated:
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.
However, despite these updated exchange “website landing pages” drawing substantial amounts of scrutiny from regulators, industry leaders said that as long as an exchange’s server remains outside of China, that it would be a “huge challenge” for governmental bodies to stamp out all instances of cryptocurrency trades and transactions.
China’s Alternative Mode Of Crypto Trading
The South China Morning Post went on to describe how Chinese crypto investors have been trading following the ban. First prospective traders will need to find a way to purchase Tether tokens for Yuan, which can be done via exchange sites that offer Tether-to-yuan trading after the two sides of the trade submits fulfill the proper KYC requirements. The “exchange” oversees the trades, ensuring that both sides of the agreement get what they were asking for.
Sources told the SCMP that money will be transferred from bank-to-bank, or via third party payment networks, like AliPay or WeChat. Once the Tether appears in the wallet of the trader, he/she/they can trade these tokens on foreign exchanges through the use of VPNs and similar programs.
Photo by 郑 无忌 on Unsplash
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