How Chinese Bitcoin Buyers Are Getting Around Government Ban
From Cointelegraph
Chinese citizens are still investing in Bitcoin and the cryptocurrency market despite the government’s heavy crackdown.Read more: https://cointelegraph.com/news/how-chinese-bitcoin-buyers-are-getting-around-government-banIn September 2017, Chinese cryptocurrency exchanges BTCC China, Huobi and OKCoin were ordered by the government to shut down their businesses. At one point, executives of the three cryptocurrency exchanges were prevented from leaving the country, due to a government investigation into local cryptocurrency exchanges.
Three months later, in December of 2017, China’s three largest cryptocurrency exchanges relocated their businesses to Hong Kong. BTCC China, Huobi and OKCoin rebranded to BTCC, Huobi Pro and OKEx, respectively. They intended to address the rapidly growing demand from Hong Kong-based investors.
Shortly after their move, the three trading platforms started to see daily volumes from Chinese investors grow exponentially. Somehow, Chinese investors were managing to circumvent Chinese trading restrictions by using Hong Kong-based exchanges. How is this possible?
In Hong Kong, it is relatively easy for investors to set up businesses. With less than $1,000, businesses can be legally created, which allows the opening of business bank accounts at Hong Kong-based financial institutions. Beginning in December 2017, many Chinese investors moved their funds from their Chinese bank accounts to Hong Kong bank accounts and started to trade cryptocurrencies more actively, effectively bypassing China’s restrictions.
I fear this could backfire and that it could cause Hong Kong to loose some of it's economic freedoms if the Chinese government continues with their plans to crackdown. This could end up hurting Hong Kong in the end and stifle investment.
Leave your thoughts in the comments below.
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is that in the end they will have to accept the bitcoin in its entirety, they will never be able to prohibit it, and if you do it then a black market will be created. it is inevitable
Blockchains make black markets more efficient than they have ever been before.
What are the penalties for individuals in PRC?
Is it a misdemeanor or a crime?
Entrepreneurs always look for a way to achieve their goals and it will be very difficult for the government to stop this growing "market", they should only look for a way for everyone to win.
definitely the bitcon is a complex but very interesting subject!
Btc his bae I invested over 2000$ in btc last two years and its buff now I can help any one if you want to invest or buy in a cheeper price.
kinda think wish bitcoin never went over 50 dollars
Thanks my friend for the article
Thanks for sharing this news..I love Bitcoin..I appreciate your every post.thanks.
good point. China would take heavy criticism from other nations though. Too much international money going through Hong Kong.
Somewhat similar to Russia & Ukraine, finances instead of Black Sea access being the real reason.
Probably the Chinese government simply wanted to push the exchanges to the more economically liberal Hong Kong and away from the controlled mainland. China has a tendency of applying different economic policies in different regions.
If the Chinese government really wanted to scare its residents away from cryptocurrencies, it could easily have prosecuted the executives of the exchanges and maybe even their clients.