Binance stops offering cryptocurrency trading in Chinese yuan
The world’s largest cryptocurrency exchange, Binance, will stop cryptocurrency margin trading involving the Chinese yuan.
This time, the new curbs doesn’t relate to the string of warnings issued by regulators across the globe about Binance and some of the trading and payment products it offers. Instead, the influential exchange delisted the yuan from its P2P trading platform as China is expanding its crypto ban, with several authorities banding together to halt adoption in the mainland.
“In response to the regulatory requirements of the local government, Binance C2C will delist the CNY trading zone at 24:00 (East Eighth District Time) on December 31, 2021, the exchange said.
In addition, Binance stated that it will limit mainlanders’ access to its platform. Specifically, it will conduct “an inventory of platform users,” and if Binance finds Chinese users it will switch their accounts to the “withdrawal only” mode.
“Binance withdrew from the Chinese mainland market in 2017 and does not engage in exchange business in mainland China. Binance has always attached great importance to compliance obligations and has always strictly complied with the relevant requirements of local regulatory agencies,” the exchange further explains.
China’s ongoing crackdown on cryptocurrencies has forced major exchanges to halt providing its services to users in the mainland. Binance, Huobi and other exchanges have already begun to block Chinese customers from accessing their platforms.
Additionally, Huobi said it would close Chinese users’ accounts by December 31, 2021. Binance also discontinued operations for mainland citizens and is no longer accepting user sign-ups with Chinese phone numbers, citing renewed regulatory guidelines in the country.
The escalation in crypto restrictions in China has led mainlanders to seek alternate trading avenues such as decentralized exchanges (DEXs) and OTC desks. These venues are now considered viable alternatives as a result of the Chinese authorities’ decision to double down on its crypto prohibition.
To erase any doubts about their intentions, Chinese internet services were ordered to block specific keywords related to crypto exchange and also banned any crypto-related search queries.
Per media reports, the central bank plans to “promptly clean up and rectify” these platforms for providing illicit crypto trading activities. The state-owned media called these measures “rectification,” a term used to describe that authorities are bringing crypto operators in line with local regulation. The same term has been used before, namely in 2020 when China authorities cracked down on financial giant Ant Group.
The latest enforcement action underscores Chinese regulators’ determination to curb crypto trading to control financial risks, despite certain benefits to local economies.
The local officials will be also tasked with ceasing operations of any identified cryptocurrency exchanges, along with any fundraising business or token sales, which is a criminal offense in China.