In response to the People’s Bank of China (PBOC) labeling all crypto-related activity as illicit, the world’s largest Bitcoin exchanges Huobi and Binance, have been forced to shut shop by stopping new account creation in the country.
Huobi Shutting Shop By End Of 2021
Both the exchange operators will no longer accept mainland China mobile numbers to register new accounts. Furthermore, Huobi has also announced that it will shut down existing accounts by year-end.
The exchange announced the latest move in a public statement,
“To comply with local laws and regulations, Huobi Global has ceased account registration for new users in Mainland China. Huobi Global will gradually retire existing Mainland China user accounts [by the end of December] and ensure the safety of users’ assets.”
At the same time, a Binance spokesperson said that the company has stopped conducting exchange operations in China by blocking Chinese IPs, saying that the company is following full compliance and sticking to local regulator requirements.
Will Other Exchanges Follow?
Despite banning China-based mobile numbers, both the exchange operators are still accepting new sign-ups from Hong Kong. Binance, Huobi, and OKEx make up the top three crypto exchanges in the world. However, Huobi’s move to end all China operations by the end of this year has raised the question of whether the other two major players would follow suit or not.
Crypto journalist Colin Wu definitely thinks so. He tweeted,
“The most severe action has finally come. Let's see if Binance and OKEx will follow up.”
Users can still use mainland China numbers to register on OKEx as of Sunday morning in Hong Kong.
China’s Unrelenting Crypto Stance
On Friday, China’s central bank issued the “Notice on Further Preventing and Disposing of the Risks of Hype in Virtual Currency Transactions" banning all crypto-related transactions. As per the notice, all crypto services including trading, order matching, token issuance, and derivatives for virtual currencies, have been deemed illegal. The move is the latest in China’s tough stance on cryptocurrencies. In 2017, China clamped down on local exchanges, forcing them to move base to crypto-friendly nations of Singapore and Malta for their main trading platform. Then in June, following a renewed clampdown on crypto trading and mining by China’s cabinet, Huobi stopped letting Chinese users trade in risky products like derivatives.
However, Chinese traders on Huobi and Binance were still able to access most of the services until now. Even after the crypto mining ban in July, many traders and miners were hopeful about finding loopholes to continue their operations. However, the recent notice from the PBOC that explicitly labels all crypto-related activity as illegal will now make it almost impossible for traders and miners to continue their work.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.