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From suspending registration of users in mainland China to forcibly clearing out users in mainland China, under the continuous crackdown by regulatory authorities, domestic virtual currency transactions have completely “cooled down”. The three leading virtual currency trading platforms, Huobi, Binance, and OKEx, have successively “officially announced” their withdrawal from the mainland Chinese market. Moreover, according to statistics from Beijing Business Daily, as of October 14, at least 10 virtual currency exchanges have announced the withdrawal of existing users from mainland China, and some small and medium-sized institutions have directly announced their closure. Given that the exchange's severance of trading channels is a foregone conclusion, many cryptocurrency users have also begun to try to find new trading paths before the "deadline". Top trading platforms exit one after another
Since the central bank and ten other departments once again blocked virtual currencies and their trading activities on September 24, virtual currency exchanges have also set off a wave of withdrawals. On October 13, leading virtual currency trading platforms Binance and OKEx successively issued announcements to explain the regulatory policies in mainland China.
According to the "Notice on Delisting C2C CNY Trading Area and User Inventory in Mainland China" issued by Binance, in response to local government regulatory policy requirements, Binance C2C will delist the CNY trading area at 24:00 on December 31, 2021, Eastern Time, and will conduct an inventory of platform users.
Binance mentioned in the announcement that it will conduct a review of platform users. If the platform finds users from mainland China, their corresponding accounts will be switched to "withdrawal only" mode, and users will only be able to withdraw, cancel orders, redeem, and close positions. Binance will notify the corresponding users by email 7 days before the account switch.
OKEx also mentioned in the "Notice on Regulatory Policies in Mainland China" that the company has shifted its business focus to the international market since September 2017, and has not promoted and provided services for the mainland China market. Its website is inaccessible in mainland China, and its App has been removed from all application markets in mainland China. It will continue to maintain the policy of "withdrawing from the mainland China market" and will not set up offices and teams in mainland China. OKEx did not provide detailed explanations in the announcement on how to manage users in mainland China who are still trading on the platform.
Before Binance and OKEx, Huobi has issued several announcements on the process of clearing out existing users in mainland China since September 24, explaining issues such as closing transactions, suspending trading, and withdrawing funds.
Many industry analysts said that the withdrawal of exchanges was the "only choice". Liu Feng, director of the Blockchain Technology and Application Research Center of Shanghai University of International Business and Economics, also said that judging from the documents issued by various ministries and commissions, China has maintained a high-pressure supervision on virtual currencies, and it is not surprising that virtual currency exchanges have withdrawn from the mainland market.
Regarding the progress of the rectification and subsequent business planning, the Beijing Business Daily reporter also contacted Huobi, OKEx and other companies for further information. Huobi said that the company is currently carrying out the liquidation work in an orderly manner according to the announced liquidation plan, and will make every effort to layout overseas markets in the future. As for the Binance platform, no contact information has been found yet. Users still have a lucky mentality
As the leading exchanges confirmed their withdrawal, Beijing Business Daily reporters noticed in multiple public forums that many users have reported that they are unable to download and use the exchange app by bypassing the app store and directly authorizing it. However, some users are still taking chances and trying to continue virtual currency transactions through overseas accounts and switching to overseas exchanges.
"I have just re-authenticated myself through an overseas exchange and am still waiting for the result. I don't know if it can be used. There is really no better way at the moment. I can only wait for a turnaround and try a new platform." Lin Wen (pseudonym), a user who has been immersed in the cryptocurrency circle for many years, told the Beijing Business Daily reporter.
Lin Wen said that in addition to exchanges operating in China, there are still many overseas exchanges that provide trading services, but it is not clear whether they are open to users in mainland China and whether the trading process is convenient, especially when it comes to recharge and withdrawal processes. "Now even if you download the exchange app, you still face problems such as identity authentication."
On October 14, a Beijing Business Daily reporter found that it is still possible to download the corresponding exchange app by switching to an overseas account in the Apple Store, but the registration pages of Binance and Huobi apps no longer provide registration entrances for users in mainland China. On the OKEx App, users can trade after verifying their mobile phone number and ID card.
Another cryptocurrency user in mainland China confirmed to the Beijing Business Daily reporter that Binance is still able to trade normally. In response, the Beijing Business Daily reporter also sought confirmation from Binance, but was unable to find their contact information. Huobi has already begun to deal with some trading projects in accordance with the withdrawal rules. On October 13, Huobi stopped trading in Bitcoin and Ethereum ETP projects, and user positions were forcibly withdrawn.
Regarding the current situation where domestic users are trying to trade virtual currencies through other channels, Liu Feng pointed out that this move by domestic traders does not make much sense. This time, the regulator is targeting the entire cryptocurrency ecosystem, and all miners, intermediary traders, and related organizations or individuals that provide transaction media off-chain are included in the scope of regulation. Even if it is changed to other places, as long as there are exchange transactions related to RMB and virtual currencies within the scope of mainland my country, they are all within the scope of relevant legal regulation.
Jiang Zhaosheng, a blockchain industry observer, also stressed that at a time when major exchanges have announced the gradual withdrawal of domestic users, if users are lucky, they may give some illegal virtual currency exchanges at home and abroad an opportunity to take advantage of them, which will eventually lead to personal asset losses. The regulator also clearly mentioned that foreign virtual currency exchanges providing services to residents in my country through the Internet are also illegal financial activities.
"Users should view the restrictions on cryptocurrency transactions rationally, cooperate with the liquidation actions of cryptocurrency exchanges and other relevant entities, and actively respond to regulatory requirements while ensuring the safety of personal property," said Jiang Zhaosheng. Strong regulatory momentum continues and is effective
In fact, virtual currency transactions have been under strict supervision in mainland China since 2013. On September 24 this year, more than ten departments including the National Development and Reform Commission, the People's Bank of China, and the Supreme People's Court jointly issued a document requiring further prevention and disposal of the risks of virtual currency trading speculation, and clearly listed virtual currency "mining" activities as eliminated industries.
As supervision deepens, mining activities are being phased out one after another, and related mining companies have announced that they will no longer serve Chinese users and choose to "go overseas." After blocking keywords and banning related information, exchanges that directly provide virtual currency trading services are now out of business.
Not only did the three major virtual currency trading platforms announce their withdrawal from the Chinese mainland market, but small and medium-sized virtual currency exchanges were also "left with nowhere to go". According to incomplete statistics from Beijing Business Daily reporters, as of October 14, at least 10 virtual currency exchanges, including Binance, OKEx, Huobi and other platforms, have announced the withdrawal of existing Chinese users, and some small and medium-sized institutions have even directly announced their closure.
Liu Feng believes that this rectification is to prevent financial risks on the one hand, and to focus on the high-energy-consuming behavior of virtual currency "mining" under the dual carbon strategy of "carbon peak" and "carbon neutrality" on the other hand. The full withdrawal of the currency circle ecology is inevitable.
Jiang Zhaosheng emphasized that my country's strong supervision of virtual currencies is continuous and effective. This series of rectifications will effectively maintain the stability of the economic and financial system and protect people's lives and property. At present, my country has clearly stated that it will continue to adhere to the development direction of blockchain technology with domestically produced, independently controlled alliance chains. All virtual currency activities based on public chains and involving financial attributes will be strictly regulated.
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