Enthusiastic traders are mocking the crypto ban in China. Despite the authorities launching several attacks on the cryptocurrency sector, digital currencies still survive in the country. A South China Morning Post report suggests that trade is not just active in the country but also thriving right beneath the rule of law. Even industry experts suggest that getting rid of crypto would be a tough nut to crack for the Chinese authorities, who have managed to censor information and media in the country relatively easily.
Traders Circumvent the Ban
The Chinese government patted its own back claiming that it had reduced yuan trading in digital coins from 90 percent to less than 1 percent. However, recent reports show that official data may not be a reliable means of judging the state of the crypto market in China.
Beijing has been keen on shutting down local exchange platforms. However, these entities whose operations have been shut down are now thriving underground with different names. Some of them have moved their servers outside China and registered themselves offshore. The Shanghai Securities Times, a publication associated with the country’s market and financial regulators, claimed in an Aug. 23 report that authorities have blocked 124 foreign crypto exchanges in China.
Despite these efforts, however, the Chinese crypto market is by no means under the government’s control. In fact, experts suggest that the clampdown will only discourage some novice investors in the short term. But in the long run, access to offshore entities cannot be fully curbed. Industry observers believe that it could be impossible to order a complete shutdown in crypto trading in the country.
Using VPNs and Stable Coins to Trade
Terence Tsang, COO of crypto exchange operator TideBit, explained what the government looks to investigate on:
“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.”
Exchanges with landing pages written in Chinese are particularly under inspection by the regulators.
Traders are aware of the issues. Therefore, they first convert yuan into a stable coin, chiefly Tether. They depend on client-to-client trades. An exchange that has already completed the Know-Your-Customer procedure with its customers lets two traders swap their yuan for Tether.
Investors are also using virtual private networks (VPNs) to mask their locations and identities. The government can technically restrict VPNs as well, but it would create another lengthy process of fiddling with laws and several industry stakeholders.
Did Traders Throw Caution to the Wind in China Amid Crypto Ban? was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.