Beijing’s new ban on all crypto currency transactions and cryptocurrency mining, is leading crypto currency exchanges and service providers to drive out their Chinese customers.
Shares of a number of Chinese crypto currency-related companies have collapsed following a ban that effectively closes any gaps left by previous cryptocurrency market decisions. Industry executives, however, note that many companies had already relocated key parts of their business outside of China.
According to Reuters, 10 powerful government said agencies in a joint statement on Friday, that foreign exchange offices are banned from providing services to domestic investors via the internet and pledged, among other things, to jointly eliminate illegal cryptocurrency activities.
Huobi Global and Binance, two of the largest exchanges in the world (and which are very popular with Chinese users), have stopped new Chinese registrations.
“The day we heard about the decision, we started taking action,” Du Jun, co-founder of Huobi Group, told Reuters.
Du did not say how many users would be affected, saying the company had launched a global expansion strategy many years ago, and was growing steadily in Southeast Asia and Europe.
TokenPocket, a popular cryptocurrency service provider, also said in a statement, to customers, that it would end its services to Chinese customers living in China as it “embraces” the new regulations.
According to Reuters, some of the largest crypto currency exchanges in the world come from China, but the Chinese authorities believe that crypto currencies are instruments that are prone to sharp price changes and can bypass capital controls. The Chinese authorities, however, have began thinking about developing an official digital currency.
It is recalled that many Chinese exchanges closed or moved in 2017 after China, once the largest bitcoin trading and mining centre in the world, banned such platforms from converting legal money into crypto currencies and vice versa.
Other types of Chinese crypto currencies have also left China in recent months, said Flex Yang, founder and CEO of Babel Finance. Cobo, an encryption asset management platform, has also moved its headquarters from Beijing to Singapore.