Crypto Trading Remains Active in China Despite Ban

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As a seasoned crypto investor with a deep understanding of the Chinese market, I’m not surprised by the recent reports of continued trading activities despite Beijing’s ban on digital currencies. Having lived through multiple regulatory crackdowns, I’ve witnessed how determined and resourceful the Chinese crypto community can be.

Chinese law enforcement actions have revealed that certain Chinese residents continue to participate in the digital currency market, despite Beijing’s prohibition on crypto trading. These crackdowns, aimed at curbing illegal foreign exchange transactions, offer insights into the challenges of enforcing the ban.

In May, several noteworthy instances came to light. One such case involved an underground bank under suspicion for enabling around 13.8 billion yuan ($1.9 billion) worth of fraudulent money transfers. Another instance uncovered a criminal group responsible for converting approximately 2 billion yuan through fraudulent means.

Based on Bloomberg’s findings, the reasons behind China’s Bitcoin ban include issues like money laundering, capital outflow, and environmental concerns related to Bitcoin mining. Nevertheless, Chinese residents remain eager to explore digital assets as potential investment possibilities.

Chengyi Ong, the APAC policy head at Chainalysis Inc., pointed out that a substantial portion of cryptocurrency transactions takes place in China. This could be due in part to the regulatory restrictions being less stringent or inconsistently enforced. However, another reason is the inherent decentralized and peer-to-peer nature of crypto activity.

Despite the Hong Kong authorities’ prohibition on certain aspects of digital asset trading, which partly restricts Mainland Chinese investors from making easy investments in this market, such transactions have not been completely eliminated.

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2024-05-25 04:52