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Cryptocurrency exchanges rush to cut ties with Chinese users after fresh crackdown By Reuters

by Mike Robinson

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© Reuters.

By Samuel Shen and Andrew Galbraith

SHANGHAI (Reuters) – Cryptocurrency exchanges and providers of crypto services are scrambling to sever business ties with mainland Chinese clients, after Beijing last Friday issued a blanket ban on all crypto trading and mining.

Ten powerful Chinese government agencies, including the central bank, announced that overseas exchanges are now barred from offering services via the internet to Chinese investors. This is a result of many years of effort to control the sector. They also pledged to work together to eradicate “illegal” crypto activities.

Huobi Global and Binance, the two largest and most popular exchanges worldwide, stopped mainland users from registering accounts. Huobi stated that existing accounts would be reopened by year’s end.

Huobi Group founder Du Jun said that the company began corrective actions as soon as it saw the notice.

Du declined to give an estimated number of affected users, stating that Huobi was the most popular crypto exchange and had been growing in Europe and Southeast Asia for many years.

The shares of crypto-related businesses plunged Monday. Huobi Tech, a trading platform and crypto asset manager, fell 23% while OKG Technology Holdings Ltd lost 12%. OKG Technology Holdings Ltd is a fintech firm majority owned by Xu Mingxing (the founder of OKcoin).

TokenPocket is a well-known service provider for crypto wallets and stated in a notice that it will end services to Chinese mainland clients who violate Chinese policy. It also promised to “actively embrace” regulations. In a notice to clients, TokenPocket stated it would terminate services to Chinese clients that violate Chinese policies and “actively embrace” regulation.

After China banned cryptocurrency trading platforms that convert legal tender into crypto currencies, many Chinese crypto exchanges were forced to shut down or relocate offshore. China’s State Council pledged to prohibit bitcoin mining and trading in May of this year.

Flex (NASDAQ; Yang), founder and CEO at Babel Finance said that other Chinese cryptocurrency companies had been leaving China in recent months amid the crackdown. He also stated that there would not be any significant impact on the new policy.

Chinese cryptocurrency financial services company Cobo opened its new Singapore headquarters this month.

Cobo, which is also a custodian and crypto asset management company, recently relocated from Beijing.

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