Binance Defies Chinese Crypto Ban, Maintains Foothold With $90 Billion Volume: WSJ Report

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Binance, the world’s leading crypto exchange, has managed to defy the odds and maintain a significant foothold in China’s crypto market, despite the country’s strict ban on cryptocurrency trading since 2021.

Let’s dive deeper into this captivating story of resilience and grit, and hopefully… victory?

China’s Cryptic Crypto Appetite

Contrary to China’s official stance, cryptocurrency trading remains alive and thriving within the country. According to exclusive data accessed by The Wall Street Journal, Binance users traded a staggering $90 billion worth of cryptocurrency-related assets in a single month, constituting a remarkable 20% of the exchange’s global volume. This impressive figure doesn’t even include trades made by a select group of prominent traders. Furthermore, the exchange’s investigations team is actively cooperating with Chinese law enforcement to uncover potential criminal activities among its nearly one million active users in China.

Dancing With the Dragon

Binance’s journey in China has been anything but smooth. Besides facing regulatory charges and investigations worldwide, including legal action from the U.S. Securities and Exchange Commission (SEC) and the Justice Department, the exchange has witnessed a significant loss of market share in the United States.

Nonetheless, the crypto giant’s covert operations in China reveal its resourcefulness in navigating territories where it isn’t officially welcome.

Read More: Binance Almost Closed U.S. Exchange to Protect Worldwide Business: The Information Report

Binance Makes it Big in China

Binance’s triumph in China can be attributed to a clever strategy involving the redirection of users through various websites with Chinese domain names before ultimately rerouting them to the global exchange. This cunning approach allows the exchange to bypass China’s stringent restrictions on accessing its platform. While the company claims its website is blocked for Chinese users, the truth appears to be shrouded in mystery.

Binance’s operations in China play a pivotal role in its battle against the global regulatory onslaught. The constant scrutiny poses a significant threat to the exchange’s existence, making its foothold in China all the more crucial.

It Isn’t That Straight-Forward!

The roots of Binance’s connection with China run deep. Founded in Shanghai in 2017 by Changpeng Zhao, a Chinese-born Canadian, the company was forced to relocate to Japan due to China’s initial crackdown on crypto exchanges. Despite moving abroad, Binance maintained a substantial workforce in China, raising concerns about data control and security for its international branches.

Zhao has highlighted the paradox of being considered a ‘Chinese company’ while simultaneously facing accusations of criminality in China.

Related: Binance Japan to Launch in August with 34 Token Offerings and BNB Listing!

China’s Thriving Crypto Market

Despite the ban and an initial decline in trading volume, China’s cryptocurrency market remains strong. As per crypto research firm Chainalysis, it stands as the fourth-largest market for crypto trading globally.

This resilience owes in part to creative workarounds, such as the use of Virtual Private Networks (VPNs) to mask users’ locations, and innovative initiatives like the Dominican digital citizenship program, which rival exchange Huobi offered to Chinese users.

In defiance of the Chinese crypto ban, Binance’s operations in China continue to thrive, with the exchange employing innovative strategies to maintain its market share. After experiencing an initial drop following the 2021 ban, its user base has seen a resurgence, with over $90 billion in cryptocurrencies traded in May 2023 alone, predominantly in futures contracts tied to cryptocurrencies.