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China’s crypto ban doesn’t stop Binance with $90 billion reportedly traded

China's crypto ban doesn't stop Binance with $90 billion reportedly traded

Binance, the world’s largest crypto exchange, was supposed to cease operations in China when the country made cryptocurrency trading illegal in 2021.

However, in May, users traded approximately $90 billion worth of cryptocurrency-related assets, as reported by The Wall Street Journal based on internal data along with input from current and former employees. These transactions established China as Binance’s largest market, constituting 20% of global volume, excluding trades made by a subset of large traders.

As these claims have emerged, Binance has refuted any involvement in conducting business within China. A Binance representative stated in an email to the CoinTelegraph: “The website is blocked in China and is not accessible to China-based users.“

Internally, Binance openly acknowledges the significance of China for its operations, but the exchange’s investigations team collaborates closely with Chinese law enforcement to identify potential criminal activities among the over 900,000 active users in the country, as revealed to WSJ by some of the current and former employees.

Although the Chinese regulators have the capability to enforce regulations, as proven by their track record, they appear to have adopted a softer approach in this instance, as evidenced by the large number of active users on Binance.

“China’s cryptocurrency market remains strong, with healthy transaction volumes across both centralized and [decentralized] services,” shared Kim Grauer with WSJ, director of research at Chainalysis, a crypto research company. Even though there was an initial drop after the 2021 ban, China currently ranks as the fourth-largest market for crypto trading, according to Chainalysis.

New month, same story 

According to a CNBC investigation published in March, employees and volunteers at Binance have allegedly been assisting customers in China to subvert the exchange’s Know Your Customer Controls (KYC).

The report highlights Binance’s Chinese-language chat rooms, with over 220,000 registered users, where shared messages offer methods to bypass the exchange’s KYC, residency, and verification processes. These messages are said to originate from accounts identified as Binance employees or trained volunteers known as “Angels.”

Binance’s relationship with China has been intricate. The company was established in Shanghai in 2017 by Changpeng Zhao, a Chinese-born raised in Canada. However, shortly after its inception, the Chinese government initiated a series of regulatory crackdowns on crypto exchanges, fearing potential illicit money outflows. In response, Zhao relocated Binance’s operations to Japan.

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