Cryptocurrency exchanges rush to cut ties with Chinese users after fresh crackdown

Bitfire group

27/09/2021 05:23

By Samuel Shen and Andrew Galbraith
    SHANGHAI, Sept 27 (Reuters) - Cryptocurrency exchanges and
providers of crypto services are scrambling to sever business
ties with mainland Chinese clients, after Beijing last Friday
issued a blanket ban on all crypto trading and mining.
    In a culmination of years of efforts to rein in the sector,
10 powerful Chinese government bodies including the central
bank, said overseas exchanges were barred from providing
services to mainland investors via the internet - a previously
grey area - and vowed to jointly root out "illegal"
cryptocurrency activities.
    Huobi Global and Binance, two of the world's largest
exchanges and popular with Chinese users, have stopped new
registrations of accounts by mainland customers. Huobi also said
it would clean up existing ones by the end of the year. 
    "On the very day we saw the notice, we started to take
corrective measures," Du Jun, Huobi Group co-founder said in a
statement to Reuters. 
    Du did not give an estimate how many of its users would be
affected, saying only that Huobi, once the world's biggest
crypto exchange, had embarked on a global expansion strategy
many years ago and seen steady growth in Southeast Asia and
Europe. 
    Shares in crypto-related firms tumbled on Monday with crypto
asset manager and trading firm Huobi Tech  1611.HK  plunging 23%
and OKG Technology Holdings Ltd  1499.HK , a fintech company
majority owned by Xu Mingxing, the founder of cryptoexchange
OKcoin, losing 12%.        
    TokenPocket, a popular service provider of crypto wallets,
also said in a notice to clients that it would terminate
services to mainland Chinese clients that risk violating Chinese
policies and would "actively embrace" regulation. It added it
welcomes cooperation from China in blockchain technologies.
    Many Chinese crypto exchanges shut down or moved offshore in
2017, after China, once the world's biggest bitcoin trading and
mining centre, banned such platforms from converting legal
tender into cryptocurrencies and vice versa. Then in May this
year, China's State Council vowed to ban bitcoin trading and
mining.
    Amid the crackdown, other types of Chinese crypto companies
have been moving out of China over the past few months, said
Flex Yang, founder and CEO of Babel Finance, adding that the
impact from the latest policy would be "limited". 
    The Chinese crypto financial services provider this month
opened new business headquarters in Singapore.
    Cobo, a crypto asset management and custodian platform, also
recently moved its headquarters from Beijing to Singapore.

 (Reporting by Samuel Shen and Andrew Galbraith; Editing by
Edwina Gibbs)
 ((samuel.shen@thomsonreuters.com;  +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))