Welcome, and thank you for being part of the MyZucoins community! Let’s get into an interesting piece of crypto, finance or tech news to stay ahead.
Crypto Is Illegal In China. Binance Exchange Does $90 Billion Of Business There Anyway
Despite China’s cryptocurrency ban in 2021, Binance, the world’s leading crypto exchange, has managed to maintain a significant presence in the country.
In just one month, the exchange saw $90 billion worth of cryptocurrency-related assets traded by Chinese users, making China Binance’s largest market, accounting for 20% of its global volume. This is in spite of the exchange’s website being officially blocked in China.
Binance has cleverly sidestepped these restrictions. Users in China are directed to different websites with Chinese domain names, which then reroute them to the global exchange. As a result, Binance continues to support more than 900,000 active users in China.
The company’s ability to operate in this manner is pivotal for its survival as it faces global regulatory challenges, including lawsuits and ongoing investigations by the U.S. Securities and Exchange Commission.
Binance’s founder, Changpeng Zhao, has expressed the difficulties of operating within China’s legal landscape, stating that offshore exchanges have been designated as criminal entities. Despite this, China remains the fourth-largest market for crypto trading, according to Chainalysis, a crypto research company.
The popularity of cryptocurrency in China has even prompted another exchange, Huobi, to offer Chinese users “digital citizenship” in Dominica to allow them to trade on the platform.
Despite the ban, Binance’s trading volume in China rebounded in 2022, with China-based customers trading over $90 billion in cryptocurrencies in May 2023, primarily in futures contracts tied to cryptocurrencies.
This continued operation, albeit covert, highlights the resilience of cryptocurrency exchanges amid stringent regulations. Read more here.
Crypto Is Hard To Stop
Understanding the need for adaptability in the face of regulatory challenges is crucial for any emerging crypto product, even centralized exchanges.
As seen in the case of Binance, maneuvering around legal constraints can be a complex task, but not impossible. Zucoins and its underlying Splitchain network can learn from this situation by ensuring its operations remain transparent and compliant with global regulations, which they have been doing.
The resilience of the cryptocurrency market in China despite the ban highlights the potential for crypto products to thrive even in challenging regulatory environments.
Binance’s strategy of circumventing restrictions by rerouting users through different domains details the need for crypto products to be proactive and innovative. While Zucoins should not mimic such practices, the takeaway here is the importance of innovation and adaptability.
As the crypto landscape evolves, Zucoins needs to continually evolve too, as they have been, developing new strategies and features that meet the needs of users while also staying within the confines of regulatory requirements.
Continuing along Zucoins’ decentralization strategy means they’ll need to further consider ways that the Zucoins community can build upon future changing environments themselves, with the Splitchain protocol providing enough flexibility for this to occur.
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All the best,
Peter & Rob
MyZucoins