Huobi, Binance Suspend Chinese Sign-ups as Gov Crackdown Intensifies

abdelaziz Fathi

China’s ongoing crackdown on cryptocurrencies has forced major exchanges to halt providing its services to users in the mainland.

Just hours after the Chinese government vowed to root out all digital-asset activities, Binance, Huobi and other exchanges have 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.

“Binance takes its compliance obligations very seriously and is committed to following local regulatory requirements wherever we operate. As such, Binance does not currently hold exchange operations in China. We can also confirm that Chinese mobile phone registrations are blocked and the Binance app is not available in China for downloading,”  a Binance spokesperson told financial media outlets.

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.

In joint statements released Friday, Chinese central bank along with other agencies, including the supreme court and the internet watchdogs, said all kinds of crypto transactions in China are banned.

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.

The move shows a centralized effort from Beijing to completely eradicate unregulated crypto business on the mainland. The government ‏plans to close the few remaining loopholes in order to entirely restrict its citizens from transacting ‎cryptocurrencies or participating in trades held abroad.‎

Beijing’s tougher stance will also target overseas platforms that offer exchange-like services ‎to mainlanders and allow them to trade the digital assets.‎ The current rules already scrutinize Chinese banks, online-payment providers, and individuals suspected of facilitating trades on offshore cryptocurrency venues.

Read this next

Industry News

Celsius $750m insurance claims are fraud, says lawyer seeking EU crypto superfund

“It is an intentional deception in aid of a billion-dollar securities offering.”

Institutional FX

DGCX brokers authorized to provide derivatives trading and clearing services

The DFM is looking to provide multiple asset classes such as; equities, ETFs, equities’ futures, crude oil futures, etc. to meet the growing demand from its diversified base of local and international investors.

Digital Assets

EQONEX leaves “crowded crypto exchange space” amid crypto winter

“The recent extreme market volatility and declining trading volumes have added to the headwinds being felt by exchange operators. We take a realistic view that our exchange will not move the needle for us financially over the near-to-medium term.”

Digital Assets

FTX and Paradigm partner for spreads trading: lower risk, lower fees

“This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”

Industry News

SEC uncovers online retail brokerage hacking scheme

Fraudsters were able to sell their holdings at artificially high prices and reap more than $1 million in illicit proceeds, the SEC alleged. 

Executive Moves

Cornerstone FS taps James Hickman as CEO

“I see great potential in the business from its proprietary technology to its regulatory permissions. It is already delivering an exceptional service to its SME customers and the scalable platform is ideally positioned to add further product capability.”

Retail FX

FCA warns of Lite Forex Pro as crackdown on clone scams continues

The UK Financial Conduct Authority has put out a press release that warns about a new ‘clone firm’ investment scam impersonating LiteForex‎, which rebranded last year as LiteFinance.

Digital Assets

Novogratz’s Galaxy Digital backs out of $1.2 billion deal to buy BitGo

Crypto merchant bank Galaxy Digital would not move forward with its bid to buy digital-asset custodian BitGo.

Executive Moves

OctaFX elevates Nikolas Charalampous to executive director role

OctaFX has promoted its head of dealing, Nikolas Charalampous, to the role of executive director, which saw the expansion of his day-to-day responsibilities and oversight.

<