Crypto exchange stops taking China users as Beijing widens ban

Topics Beijing | cryptocurrency | China

Photo: Reuters
Huobi, China’s largest Bitcoin exchange, has halted new registrations for domestic users, taking one of the first actions to comply with Beijing’s latest crypto ban.

The exchange operator has stopped letting traders use mainland China mobile numbers to register new accounts, after the People’s Bank of China said Friday all crypto-related transactions will be considered illicit financial activity. New sign-ups are still available for Hong Kong users, but mainland China is no longer an option for new-account creation. A Huobi spokesperson declined to comment.

China’s latest pronouncement -- issued by the central bank along with nine other government agencies including the public security ministry -- is the culmination of years of attempted crackdown on the rise of Bitcoin and its peers. Friday’s notice specifically called out offshore exchanges targeting Chinese users, banning them from hiring locally for roles from marketing to payment settlement and tech.

In 2017 China told local exchanges to stop hosting trades between fiat money and crypto tokens, spurring companies like Huobi to set up shops in friendlier jurisdictions like Singapore and Malta for their main trading platforms. Still, Huobi offers Chinese users services like over-the-counter trading and crypto-to-crypto transactions.

In June, Huobi banned existing Chinese users from trading riskier products like derivatives, after China’s cabinet called for a renewed crackdown on crypto trading and mining. There is no indication that Chinese users are barred from Huobi altogether.

Former Oracle Corp. coder Leon Li founded Huobi in 2013 in Beijing and later received backing from venture firms ZhenFund and Sequoia China. It’s widely regarded as one of the big three crypto exchanges that originated in China, along with OKEx and Binance.

Users can still use mainland China numbers to register on OKEx and Binance as of Saturday afternoon in Hong Kong.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel