Binance is discontinuing its peer-to-peer trading service in China and severing the last link to the market amid the crackdown on cryptocurrencies in Beijing
Binance, the world’s largest cryptocurrency exchange, which has received multiple warnings from regulators, said it will cease its peer-to-peer trading service in China by the end of 2021, which would mark a clear break with a market it has largely withdrawn from from 2017.
The company announced on its website on Wednesday that the move was “in response to regulatory and political requirements”. The peer-to-peer service has enabled residents of mainland China to buy and sell digital currencies bilaterally using fiat currencies such as the yuan, although Binance almost left China in 2017 after the government cracked down on it that year the cryptocurrency exchange had proceeded.
“Binance has not been in the stock exchange business in China since 2017,” it said on its website, adding that it has focused on meeting its compliance obligations.
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Binance’s move comes after the People’s Bank of China (PBOC) recently warned that any overseas cryptocurrency exchange offering services to Chinese citizens over the internet is engaged in illegal financial activities.
Any person or organization providing sales and marketing, payment processing or technical support “who should knowingly or should know that they are doing business in virtual currency” will be investigated in accordance with the law, the central bank said.
For Binance, ranked as the largest exchange among the nearly 300 exchanges tracked by CryptoCompare, China is just one of over 180 jurisdictions it has provided services to.
Founder and CEO Zhao Changpeng said in a September interview with the Post that the exchange’s top priority is obtaining licenses in markets poised to regulate the $ 2 trillion cryptocurrency sector. The most obvious attempt so far has been in Singapore, where it has applied for a Payment Service Provider license that would allow it to offer exchange trading services in the city-state.
The story goes on
“As the largest player in the industry, we need to prepare for change. We’re making changes to make it easier to work with regulators, ”said Zhao, referring to the extensive changes Binance has made internally to gain regulatory approval for licenses.
The exchange, which has been hit by numerous regulatory warnings this year, including in the UK, Hong Kong, Japan, Singapore and Italy, stopped trading derivatives in Hong Kong in August. It did after the Securities and Futures Commission issued a warning in July that Binance was not licensed or registered to offer securities, a regulated activity in the city.
Binance is nowhere near the only cryptocurrency business affected by the recent PBOC crackdown.
Another exchange, Huobi, has also stopped registering new users in mainland China since September. Some miners like SparkPool, one of the world’s largest Ethereum mining pools, as well as intermediary information and data providers have also fled.
Another firm, OKEx, said it intends to shut down its Chinese operations, which include sales, tech support and business development, according to people close to the exchange.
“The OKEx mobile app has [disabled] its respective marketplaces that apply to China [users]”It said in a statement posted on its website on Wednesday.” OKEX will continue its policy of exiting mainland China and not opening any branches there. “
This article originally appeared in the South China Morning Post (SCMP), the most authoritative language coverage of China and Asia in more than a century. You can find more SCMP stories in the SCMP app or on the SCMP’s Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.