Over 90% of crypto-related businesses shut down in China after ban
Published: Oct 08, 2021 05:39 PM
Photo: Xinhua

Photo: Xinhua

More than 20 major firms involving crypto currency businesses, including trading exchange, crypto mining and crypto information platforms, have suspended services to Chinese mainland users and announced plans to exit from the Chinese market as of Thursday. 

Their exit means over 90 percent of crypto-related businesses have been shut down in China following the country's broad and strictest ban on crypto trading yet, observers said, which further closes loopholes in the government's crackdown against an industry that poses tremendous financial and criminal risks and cut off Chinese speculators' channels to access to the crypto market.

Huobi, one of the three major exchanges with a large Chinese user base, released detailed rules on the exit of Chinese mainland users in early October, after it announced in September to finish de-registering users whose personal identification details show them as mainland residents at the end of 2021. The platform suspended new registrations from mainland users on September 24.

Binance, another big three crypto exchange, also halted new registrations for mainland users in September. Other smaller trading platforms such as BiKi said it will officially stop operations by November 30.

In terms of crypto mining services, China-based Sparkpool, the world's second-largest mining pool based on Ethereum blockchain, halted access for Chinese users in September, with plans to suspend existing users in China and abroad. 

Another Ethereum mining pool, BeePool, announced to suspend all its service to miners starting on October 15. Graphics card manufacturer NBMINER also said in September that they would no longer provide technical support for Chinese customers.

Crypto information providers including coingecko and coinmarketcap have also been following suit, banning Chinese mainland users from logging into their website. 

"Almost all major crypto business providers have plans to shut down Chinese service. And those left and not in the scope of supervision are of very limited scale and not very well known, meaning that all the doors for Chinese to access the speculative market have been closed," Shentu Qingchun, CEO of Shenzhen-based blockchain company BankLedger, told the Global Times on Friday. 

In September, the People's Bank of China (PBC), the country's central bank, ruled all crypto transactions illegal in China. 

Beijing banned Bitcoin mining and exchanges in earlier stages of the crackdown on crypto currencies. But the new move has expanded to prohibit all related activities, including order matching, token issuance and virtual currency conversion - which hit the market hardest.

Lawyers said that under the new regulation, all crypto-related platforms and their employees, regardless of whether they're registered in China or abroad and whether employees are based in China or abroad, are subject to criminal penalties as long as they continue to provide services to Chinese mainland users. 

Governments at provincial levels have also tightened the crackdown targeting crypto industry in recent months. 

In September, the Development and Reform Commission of Bayannur City in North China's Inner Mongolia Autonomous Region discovered and seized 10,100 illegal cryptocurrency mining devices, Xinhua News Agency reported on Tuesday. The power consumption of the confiscated equipment is estimated to be 1,104 kilowatt-hours.

Global Times