Chinese Traders Are Circumventing Cryptocurrency Ban En Masse: Report

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Sun, 09/09/2018 - 08:17
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    Chinese crypto enthusiasts might be struggling, but the effect of the government’s ban on cryptocurrency trading was definitely overestimated

Cover image via U.Today

South China Morning Post reports that the infamous Chinese crackdown on crypto did not produce a desirable effect– local cryptocurrency traders will always find the way to gain access to exchanges despite the ban.

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The ban proved to be ineffective

On Aug. 23, China started putting offshore Chinese exchanges under intense scrutiny, which subsequently made their trading volume plunge by 33 percent. However, it turns out that this effort to completely block exchanges wasn’t a big success in the long run. P2P exchanges that locate their servers outside of China are still thriving.   

P2P, Tether, VPN– the starter back of a Chinese trader          

First of all, traders have to buy Tether (USDT) with Yuan. Tether is their primal choice, because this stable coin, as its name suggests, tends to be less volatile than Bitcoin. The decentralized peer-to-peer exchange only facilitates the trading process between a buyer and a seller that are usually required to fully complete their KYC before making any trades

Chinese investors who would like to buy Tether normally send money to an exchange with the help of a bank transfer, or they can simply use an online payment platform of their choice. After buying Tether, Chinese traders are able to use any crypto-to-crypto exchange by enabling VPN.

There is no way to easily identify crypto transactions

As of now, China still hasn’t issued a ban on using VPN (implying that it would be technically possible). However, the country’s authorities are already trying to prevent the aforementioned payment services from conducting crypto-related transactions. While Ant Financial (formerly known as Alipay) has pledged to block any accounts that were suspected of cryptocurrency trading, some industry experts remain skeptical about the possibility of identifying and restricting such transactions.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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