- Despite banning Crypto in 2021, China is still Binance’s biggest market.
- Crypto exchange traded over $90 billion worth of crypto assets in May according to WSJ and Reuters.
- It is not clear whether the Chinese authority will tighten their surveillance after this exposure’ or not.
Despite Binance being rendered illegal in China, the cryptocurrency firm gets most of its business from the country.
According to the Wall Street Journal, the crypto exchange had over $90 billion of spot and futures trading volume from China in May.
The WSJ while citing undisclosed internal documents said the cryptocurrency firm has been able to help its users bypass restrictions from the Chinese authorities by directing them to Chinese domains before rerouting them to the platform.
China has been promoting its use of central bank digital currency and in 2021, in a bid to promote its uptake, banned all cryptocurrency-related activities including mining and trading of tokens.
The world’s largest cryptocurrency is blocked in China and is not accessible to China-based users.
Binance has weathered storms to continue voluminous trading despite the ban from the Chinese market as well as a legal suit by the U.S. Security Exchange Commission (SEC) . Its combined spot and bitcoin futures trading volume was over $670 billion in May according to statistics by The Block; a Bitcoin, Ethereum and Crypto premium news site.
The Cryptocurrency Company has openly discussed internally how important China is to them and has gone to the extent of working with a law enforcement agency from China to detect potential criminal activities among their active users in the country. Binance had 5.6 million China-based users as of May according to Mission Control and over 911,000 active users.
According to WSJ, about 100,000 Chinese users at Binance were classified as politically exposed persons (PEPs), bringing to question verification processes at the crypto exchange company.
Legal Woes
Binance woes are far from over as it is facing scrutiny from U.S. regulatory authorities and is currently facing a suit on 13 charges including the sale of unregistered financial securities and misuse of customers’ funds. The CEO of Binance Changpeng Zhao is also enjoined in the same suit. The bad news has damaged the company’s image as the company recently cut over 1000 of its 8,000 jobs globally.
The History of Binance
Binance Holdings Ltd., branded Binance is a privately-held global company which was founded in 2017 by Chnagpeng Zhao, a developer who had previously created high-frequency trading software.
In September 2017 China banned crypto initial coin offerings (ICOs) and blocked Binance’s website. In 2021, China’s central bank declared all crypto-related transactions illegal.
Binance operates the largest cryptocurrency exchange in terms of the daily trading volume of cryptocurrencies. According to their company, “They operate the world’s biggest bitcoin exchange and altcoin crypto exchange in the world by volume”
It is not clear what damage this expose’; which has appeared on major news outlets including; Reuters and The Wall Street Journal will do to Binance; whether the Chinese Authorities will react or not.
