Crypto exchanges and crypto service providers in China are scrambling to cut ties with mainland China traders following a blanket ban on crypto trading and mining. A report unveiled this news earlier today, noting that the 10 Chinese government agencies plan to uphold a high-pressure clampdown on digital asset trading. The entities looking to enforce this ban include the People’s Bank of China (PBoC), banking, securities, and foreign exchange regulators.
According to the report, offering crypto services to mainland China citizens via the internet was previously a gray area. With this fresh ban, the involved agencies seek to eradicate any illegal crypto-related activities. PBoC also barred financial institutions, payment firms, and internet firms from facilitating crypto trading in the country.
Reportedly, the Chinese government seeks to safeguard people’s properties and maintain economic, financial, and social order through these changes. In response to the new restrictions, Binance and Huobi, two of the world’s leading crypto exchanges, which are popular among Chinese crypto enthusiasts, have halted new account registrations.
Huobi also vowed to sever ties with the active crypto accounts in mainland China before the end of the year. Per the exchange’s co-founder, Du Jun, Huobi started a global expansion strategy many years ago and had recorded remarkable growth in Southeast Asia and Europe. Jun, however, failed to disclose how many users would feel the pinch of Huobi’s exit from China.
Crypto companies continue exodus from China
Apart from Binance and Huobi, TokenPocket, a leading crypto wallet service provider, disclosed that it would end services to mainland Chinese in a bid to embrace regulation. The company added it welcomes cooperation from China in blockchain technologies.
Following the blanket ban on crypto trading, shares of related companies in China plummeted significantly. For instance, Huobi Tech’s stock lost 23% of its value, while the shares of OKG Technology, a fintech company, lost 12%. However, the exit of crypto firms from China is set to have a limited impact, seeing as the exodus started in May after the Chinese government started clamping down on Bitcoin (BTC) mining.
Among the firms that moved to other countries before the ban on crypto trading came are Babel Finance, which established a new business headquarters in Singapore, and crypto asset management and custodian platform Cobo, which relocated from Beijing to Singapore as well.
Combined with the National Development and Reform Commission’s (NDRC) push to eradicate BTC mining in China, the news of the blanket ban on trading saw the crypto market plunge on Friday. However, leading cryptos are garnering steam as they attempt to stage a comeback.
For instance, BTC plummeted to $40,936.56 on September 24. However, the leading crypto by capitalization picked up some bullish momentum over the weekend and is trading at $43,502.29, at the time of writing. Like BTC, Ether (ETH) has also recovered from a low of $2,747.34 on Friday to change hands at $3,072.72 after gaining 1.86% over the past 24 hours.