According to the WSJ, Binance users in China have traded up to $90 billion of digital assets in just one month, despite the country’s ban in 2021.
Changpeng Zhao (CZ) founded Binance in Shanghai (China) in 2017 but moved to Japan after just a few months because of China’s ban on initial coin offerings (ICOs). In 2021, China declared all crypto-related transactions to be illegal.
According to an internal platform at Binance called “Mission Control,” Chinese customers traded more than $90 billion in cryptocurrencies in May 2023, most of the trades in futures contracts tied to Bitcoin. associated with digital currency. There are 5.6 million registered users in China on the Binance exchange, of which more than 900,000 are still active. Binance’s investigative team is working closely with Chinese law enforcement to detect potential criminal activity among these users.
China’s crypto market remains strong, with good trading volume in both centralized and decentralized services, said Chainalysis, research director at Chainalysis. According to Chainalysis, despite the initial drop after the ban in 2021, China is still the fourth-largest market for cryptocurrency trading.
In a blog post in 2022, CZ said that the biggest challenge facing Binance today is that the company is seen as a criminal entity in China, whereas the opposition in the West considers Binance to be an illegal entity. as a “Chinese company”.
Binance’s China business dropped 17% after the ban was issued, but rebounded in 2022 and remained at a steady high. Cryptocurrency traders in China often use VPN (Virtual Private Network) to protect their personal identity when registering on the exchange.
However, Binance denied reports that the exchange was hiding its operations in a country of billions of people. website Binance confirmed that Binance.com is completely blocked in China and cannot be accessed by users there.
This is not the first time Binance has been accused of maintaining relationships with Chinese customers. In March, Binance staff assisted customers in China through the Know Your Customer identity verification process. In this case, Binance said it will “take action” against employees who “may have violated” internal policies.
Despite announcing its departure in 2017, Binance has retained employees operating in China and set up an operating office through the end of 2019, while also paying employees through a Chinese bank account. according to CoinTelegraph.
In recent months, Binance has faced pressure from regulators around the world. In early June, the US Securities and Exchange Commission (SEC) accused CZ and Binance of diverting customer funds, misleading investors, and the US Commodity Futures Trading Commission (CFTC). accused Binance of being an illegal exchange. The Belgian authorities also requested that Binance cease all digital currency services in the country by June. On July 26, Binance’s application for a digital currency custody license was rejected by the German Federal Financial Supervisory Authority (Germany). BaFin) refused.
Despite the ongoing turmoil in the US and Europe, on August 1, Binance launched its trading operations in Japan with a warm welcome from Japanese financial authorities.