Chinese Crypto Traders Continues Trading Despite Government Bans. China’s decision against digital currencies is probably the harshest as compared to any country in the world. While we know that China aims to be a financial super power by 2030 and for that reason it keeps a vigilant eye on any progress happening in this domain. The wrath of the government on crypto currencies is mainly because of that reason.
After the shutdown of Chinese crypto exchanges BTCC China, OKCoin and Huobi by Government orders, they ceased their operations and the executives of these exchanges were detained for investigation.
Woes of the Chinese Crypto Traders Started
All the crypto exchanges have been shut down in China and no bank can execute transactions between any such exchanges resulting in leaving the traders helpless.
How Chinese Traders Found a Way Out?
In December 2017, these three Chinese crypto exchanges relocated their business to Hong Kong. These exchanged changed their names and respectively rebranded themselves to BTCC, Huobi Pro and Okex respectively.
Chinese Crypto Traders Continues Trading Despite Government Bans
Shortly after the start of their operations in Hong Kong they observed a significantly huge volume of trade from Chinese investors increasing on a daily basis. It was not surprising because Chinese Traders have to find a way out of government’s restrictions and they started registering themselves to Hong Kong based exchanges.
How Chinese Crypto Traders Continues Trading after Govt. Ban?
Traders exploited the business-friendly regulations of Hong Kong and started registering their businesses there. You can register a business there in less than $1,000 which also enables you to open a bank account in the local banks.
Probably this is what all a Chinese trader needed? A Bank Account in an offshore company!
In the same month, plenty of Chinese traders moved their funds from Chinese banks to Hong Kong based banks to trade cryptocurrency with more freedom. This way they effectively bypassed the restrict bans imposed on the crypto traders.
Premium in Hong Kong Exchanges Increased
As a result of this huge turn over, Hong Kong did not meet the increasing demand because of its lower supply. For that reason the premium increased significantly with a difference of $120 dollar between Hong Kong Exchanges and global exchanges like Coinbase. Traders from outside these countries also took great advantage of this easy money. They would only sell their BTC on Hong Kong exchanges and earn more than $100.
Bypassing Government’s Restrictions
To make their exchanges more business friendly for the Chinese traders, they integrated popular fintech applications being used in China such as WeChat pay and Alipay. After this move, the use of these applications in China had observed a noticeable increase from 7% to 40% after this decision.
This way Chinese Traders bypassed the government bans but the trend was observed by the government and they directed their local banks to keep an eye on all the suspicious transactions liked to Hong Kong market. However, this action is beyond their domain to restrict the Chinese traders from doing crypto business.
A Food for Thought for the Indian and Pakistani Traders
Woes of Indian and Pakistani traders are not much different than the Chinese and the recent government ban on crypto trading has forced the exchanged to seize their operations. So the question is How Chinese Crypto Traders are Still Trading? The answer is very simple. Traders are discussing different options on the internet to bypass the restrictions. The experienced traders are talking of some inexpensive and easy ways to tackle this problem while new traders and investors are clueless about the chaos.