Crypto Exodus from China Following Bitcoin Bans
Cryptocurrency companies began to leave China following restrictions announced on September 24.
Huobi and Binance exchanges no longer open accounts in mainland China.
The world's largest Ethereum mining pool will no longer operate in the country.
Several companies are beginning to emigrate following the Chinese government's ban on Bitcoin and cryptocurrencies in general. The exchanges Binance, Huobi and FTX, and the mining pool Sparkpool are some companies that announced the cessation of all activity in China.
As of September 24, 2021, the Central Bank of China communicated that all activities related to cryptocurrencies are considered "illegal" in the country. The measure includes trading and mining, so several companies have had to look for alternatives to plan their exit from China. A country that has already taken similar actions in the past.
Almost immediately, the exchange Huobi, one of the most popular globally according to CoinMarketCap data, announced that as of the same day, it was ceasing to accept new users from China to "comply with local regulations." In addition, as of December 31, it will begin phasing out accounts of users in China. More details will come soon, the official statement said.
Something similar announced the FTX exchange, which closed its offices in Hong Kong to settle in the Bahamas, according to its CEO, Sam Bankman-Fried, in a publication on Twitter. Regarding its new headquarters, the entrepreneur known as SBF on the social network assured that the Bahamas will "establish a comprehensive regulation for cryptocurrencies."
Finally, another exchange that will follow the same path will be Binance. Like Huobi, it is one of the world's leading exchanges, and it will not take registrations from new users in China either. The restriction only applies to mainland China since it is still possible to operate with both exchanges in Hong Kong.
Binance's "soap opera" with the regulators has had its longest chapter for now in 2021. The exchange has suffered legal setbacks that hinder its operations, starting with the United Kingdom but followed by other countries on different continents. The company ratified its commitment to collaborate with the authorities to advance in a joint regulation. It will have to do the same in China as well.
According to Reuters news agency, other Chinese firms, such as the financial services provider Babel Finance or the digital asset management platform Cobo, have already moved their offices to Singapore.
China forbids mining
This fierce persecution of cryptocurrency activities in China is not something new for miners in that country. For several months now, they have had to emigrate because of the ban on their activities in several provinces.
However, with these new guidelines from the Central Bank and the Government, leading global companies such as Sparkpool, the world's largest Ethereum mining pool, have limited their operations.
As recently reported by The Block, Sparkpool will no longer provide support to its mining customers in China. The mining pool accounts for 28.6% of Ethereum's network total hash rate, according to data from btc.com. The company will provide more information on this announcement in the coming hours.
Ultimately, we'll have to wait to see what measures will be taken by other companies with a strong presence in the Asian country, such as the exchange OKex or the mining equipment manufacturers Canaan Inc and Ebang International. So far, none of them has officially informed anything.