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