The 300% price rise of Bitcoin since October has revived once again the grey market of China for cryptocurrency trading. It is putting regulators on an alert with the financial risk and the capital, which is outflowing with the spike of the volatility.
China shut the local cryptocurrency exchanges in 2017. It continued to smother the market which, is accounted for 90% of global bitcoin trading. The Onshore investors are now trading with bitcoins on the platform by Chinese exchanges, which are relocating from overseas. It is including Huobi and OKEx. This Chinese trading chatroom on social media has become much busier.
Paris Chang, who opened an account the last month at cryptocurrency exchange Binance, says that he has come while looking for investment opportunities. While keeping worries aside on top of the volatility and recent sell-off, he said that this market is dedicated to big hearts.
China is now focused on cryptocurrency exchanges, which are not licensed on the mainland. Individuals now can open accounts and trade online if they want to upload details on the Chinese identity cards.
Exchanges like Binance and MXC bar bars the trading of yuan and only permit trading between cryptocurrency pairs like bitcoin and tether.
The Chinese investors can use this peer-to-peer market for buying USDT using yuan with the payment through their bank cards. It does not violate the laws of China.
However, Chinese individuals are appearing to move for capital overseas underneath the official quotas to obtain the USDT and make legitimate purchases. The security market watchdog of China told that the regional bureaux are to adopt a tighter oversight of cryptocurrency trading.
The China Securities Regulatory Commission is not yet responding to any of the emailed requests for comment. According to the lawyer, Huang Mengqi, you cannot stop people from bitcoin trading. The Chinese laws are recognized as the value for virtual assets. The absence of data and investor information on the exchange is complicating the money laundering efforts of China.
In 2020, China traded near $17.5 billion of digital assets, which flowed out of the Chinese exchanges to foreign venues. Changhao Jiang, the co-founder, and CTO of Cobo, said, “China remains a very big market for cryptocurrencies,” said Jiang, whose firm’s mission is to “make it easy to own and use cryptocurrencies.”