BitMart, CoinEx and KuCoin - three crypto exchanges that were also started by Chinese founders - announced similar mandates.Īnother major change in how Beijing regulates crypto: criminalizing hosting, brokering or even just providing information on crypto transactions. Two days after that initial announcement, Huobi said it would take this step, and would need until the end of the year to complete it. 26, and several smaller exchanges like AEX and Gate.io have done the same.Ī bigger step, which not every exchange is willing to take, is to clear out all existing users based in China. The most common response from crypto platforms has been to announce a permanent suspension of new registrations from China.
For Huobi and other effectively China-based crypto exchanges, it means their China-based employees are in danger if the companies don't execute a clean separation with Chinese users and their money. Not only does the rule make it clear that overseas exchanges are violating the law if they serve Chinese users, it also says domestic employees of "overseas virtual currency exchanges" or anyone providing services to them can be punished. The latest policy shift has closed the Huobi loophole. It also retained a significant physical presence in China, including offices and employees, until this year. Huobi, which is also among the top exchanges worldwide, registered a Seychelles-based entity and continued to allow Chinese users to open accounts there, who reportedly still contributed about 30% of the company's revenue. Since the 2017 rule didn't specify that overseas exchanges were included, some of Binance's peers continued to operate from within China. By doing so, it has avoided most of the heat this year. Binance, currently the world's largest crypto exchange, is the best example of the latter. It prompted most domestic exchanges to either register as overseas entities or shift their business operations abroad. At the time, crypto exchanges were singled out from other players in the industry and specifically told to shut down. They were the target of one of the most important crypto crackdowns before this year: China's 2017 ban on Initial Coin Offerings, commonly referred to as the "Sept. The flurry has come after Beijing released two pieces of major regulation, one focused on crypto-related finance activities, the other on mining.Įven though users in China can theoretically still use VPNs and fake identities to get around these restrictions, the latest moves from crypto companies will make their investment experience even more difficult and likely deter some from keeping at the crypto game.Īmong all of the affected companies, crypto exchanges are likely the most affected, but also the most prepared. Some have even shut down completely.įrom crypto exchanges to crypto wallet apps to crypto market data publications to decentralized mining services, at least 30 Chinese companies have released statements or changed their policies in the last two weeks.
Two weeks after China outlawed virtually all crypto-related activity, the industry is springing into action, announcing varying levels of restrictions for Chinese users.