Cryptocurrency exchanges start to cut ties with Chinese users

After Beijing labeled further operations connected to digital currencies “illegal” last week in its latest salvo against the virtual currency sector, cryptocurrency exchanges have begun severing connections with Chinese clients. Huobi, one of the world’s largest cryptocurrency exchanges, stated that it will phase out Chinese users by the end of the year, while Binance, another prominent platform, declared that it would no longer allow user sign-ups using Chinese phone numbers.

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China has traditionally been a key market for crypto investment and development, as well as a worldwide hub for bitcoin mining, a mathematical technique that generates new units of virtual currency. However, Chinese authorities have launched a broad crackdown on the crypto business in recent months, driving portions of the local economy overseas as officials have intensified pressure on a variety of industries including technology, education, gambling, and real estate.

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Shares of cryptocurrency-related companies fell on Monday, with Huobi Tech, a crypto asset management, and trading firm, falling 23%, and OKG Technology Holdings Ltd, a fintech company majority-owned by Xu Mingxing, the founder of crypto exchange OKcoin, falling 12%.

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Many Chinese cryptocurrency exchanges shut down or relocated overseas in 2017, when China, formerly the world’s largest bitcoin trading and mining hub, prohibited such platforms from turning legal money into cryptocurrencies and vice versa. Then, in May of this year, China’s State Council announced that bitcoin trade and mining would be prohibited.

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Other sorts of Chinese crypto firms have been relocating out of China in recent months as a result of the crackdown, according to Flex Yang, founder, and CEO of Babel Finance, who added that the impact of the current legislation will be “limited.”

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This month, the Chinese crypto financial services company established a new business headquartered in Singapore. Cobo, a cryptocurrency asset management and custodial platform has also relocated its headquarters from Beijing to Singapore.