Binance, the largest cryptocurrency exchange, reportedly has a big presence in China with around 900,000 active users. This is despite China banning all crypto trading activities.
Binance has a presence in China
South Korea, Turkey, Vietnam, and the British Virgin Islands also rank as large markets for Binance.
In May 2023, Binance recorded over $90 billion worth of spot and futures trading, accounting for 20% of the global volume.
The report examines possible reasons for how and why the exchange continues to operate in China.
It suggests that Binance’s regular collaboration with Chinese law enforcement to detect potential criminal activity, the use of a Virtual Private Network (VPN), and the exchange’s active peer-to-peer market trading Yuan-denominated pairs may be factors.
China and crypto: a winding relationship
China has a history of banning cryptocurrency activities. Binance, a company founded in Shanghai in 2017, had to leave due to regulatory uncertainties.
In 2009, China banned the trading of virtual currencies for real-world goods and services. In 2013, they banned banks from processing BTC transactions, triggering a 30% price dump.
Alibaba, a major e-commerce company, also banned crypto transactions in 2014.
In 2017, China banned cryptocurrency exchanges and initial coin offerings (ICOs). Bitcoin mining was also outlawed in 2019. Stricter measures and regulations against cryptocurrencies were implemented in March 2020 before mining was outlawed a year later.
Difficult to implement bans
Although there are restrictions, some believe that regulators allow crypto activity to continue. Enforcing bans will become more complex as more people adopt crypto and use VPNs.
The ban has been intended to slow down crypto growth rather than eliminate it.
China trades up to $80.6 billion in futures on Binance every month.