In a new blow to Chinese crypto traders, Binance decided to halt its Chinese Yuan over-the-counter trades and restrict access in China.
China next to go from Binance’s list
Binance has not had it easy in 2021, with a number of countries like the United Kingdom, Singapore, Australia, and others partially or fully restricting its services within their jurisdictions. China is the newest addition to this list, with the exchange announcing last week that it would end its peer-to-peer trading service in China by the end of the year. This would mark the complete exit from China, where Binance had been scaling down its operations for a number of years.
This is far from an unexpected development for experienced crypto investors since the Chinese crypto-asset market has been particularly difficult to navigate. China’s government has repeatedly cracked down on exchange and miners, forcing them out bit by bit. Binance had had to shut down its exchange business but was previously able to keep its peer-to-peer platform operating, allowing Chinese users to purchase digital currencies among themselves. While the order matching was done on Binance, the settlement happened through local regulated channels. However, it announced that “in response to the regulatory requirements of the local government, Binance C2C will delist the CNY trading zone at 24:00 (East Eighth District Time) on December 31, 2021.”
It will also begin an inventory of its users, with mainland China accounts being switched to withdrawal-only. The exchange announced that it had always attached great importance to compliance with local regulators, but that seemingly was not enough to satisfy the anti-crypto sentiment from the Chinese government.
Binance being erased from the Chinese internet
If that was not enough, Binance is facing the full might of the Chinese censorship machine. WeChat, China’s most popular messaging app, is censoring searches for Binance and no longer returning any results for searches in English. With the app having over one billion active users, this move is clearly targeted at “un-personing” the exchange. It follows a similar ban from results on Baidu and Weibo, the dominant search engine and social media platforms in China. Binance is not the first crypto trading exchange to exit the Chinese market. Previously, Huobi and OkEX have had to close down operations due to similar restrictions imposed by Chinese regulators.
Tough times ahead for Binance
This isn’t the first market Binance has been ejected from, and it will likely not be the last. This year, Australian regulators forced the exchange to halt its futures trading, and South African regulators stopped options, margins, futures, and leveraged trading on Binance in October. In September, the same had happened in Singapore, with Germany, Italy, the Netherlands, and Hong Kong issuing warnings to Binance. While the exchange is still the biggest in the world according to market capitalization and has a flourishing crypto ecosystem on its Binance Smart Chain, it will have to sort out its regulatory issues sooner rather than later if it wants to continue on its growth path.