In September 2021, China imposed a ban on Bitcoin and crypto trading but a recent report shows that the ban looks ineffective. According to reports, despite banning crypto trading nineteen months ago citizens continue to be involved in digital assets trading.
Among the 1.40 billion Chinese people some have used digital assets trading by using alternative methods like property and stocks. According to the reports, after the collapse of one of the largest cryptocurrency exchanges, FTX shows almost 8% of its users were from China. The ban was either ineffective or loosely enforced. Although it did virtually drop from a year earlier in 2022, Chainalysis estimates that the average monthly value of cryptocurrency flowing to China remained significant at $17 billion. Additionally, according to reports, FTX consists of 9 million customers whose overall worth of these assets was $11.6 billion. Essentially, bans don’t work,” said Caroline Malcolm, global head of public policy at Chainalysis, which specializes in tracking digital-asset transactions.
Jack Ding, a partner with crypto regulations expert Duan & Duan law firm said that he has six Chinese investors with a collective $10 million claims. According to reports, these creditors were part of the committee of foreign FTX customers. Also, mainland China hasn’t banned any offshore exchange for signing up its citizens.
On the other side, Hong Kong has been very actively progressing in providing a favorable atmosphere to the crypto companies. This seems an aftereffect of the outright ban on all cryptocurrency transactions by China in September 2021. Since then China hasn’t dropped its hard view on the ban.
In September 2022, David Lesperance, the founder of the law company Lesperance & Associates said that China is currently a hostile nation towards cryptocurrencies but has not made it illegal to own. Additionally, China has been constantly supporting local cryptocurrency investors despite putting restrictions on trade. According to the firm’s estimations, the amount of cryptocurrency going to China on a monthly average did roughly halve from a year earlier in 2022. However, it was still a sizable $17 billion. It will be interesting to see the upcoming developments in mainland China’s approach towards cryptocurrencies in the future.