{"id":108277,"date":"2021-03-01T13:41:22","date_gmt":"2021-03-01T13:41:22","guid":{"rendered":"https:\/\/fin2me.com\/?p=108277"},"modified":"2021-03-01T13:41:22","modified_gmt":"2021-03-01T13:41:22","slug":"chinas-furtive-bitcoin-trade-heats-up-again-worrying-regulators","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/chinas-furtive-bitcoin-trade-heats-up-again-worrying-regulators\/","title":{"rendered":"China's furtive bitcoin trade heats up again, worrying regulators"},"content":{"rendered":"

SHANGHAI (Reuters) – Bitcoin\u2019s 300% price surge since October has revived China\u2019s grey market in cryptocurrency trading, putting regulators on alert over financial risks and capital outflows as volatility spikes.<\/p>

FILE PHOTO: A small toy figurine is seen on representations of the Bitcoin virtual currency displayed in front of an image of China’s flag in this illustration picture, April 9, 2019. REUTERS\/Dado Ruvic\/Illustration<\/figcaption>

China shut down its local cryptocurrency exchanges in 2017, smothering a speculative market that had accounted for 90% of global bitcoin trading.<\/p>\n

Onshore investors now trade bitcoin on platforms owned by Chinese exchanges that have relocated overseas, including Huobi and OKEx. Once-dormant Chinese trading chatrooms on social media have become busier.<\/p>\n

\u201cI\u2019ve come to look for investment opportunities,\u201d said Paris Chang, who opened an account last month at cryptocurrency exchange Binance.<\/p>\n

Brushing aside worries over the volatility and the recent sell-off, he said: \u201cThis market is for the big hearts.\u201d<\/p>\n

China-focused cryptocurrency exchanges are not licensed on the mainland, but individuals can easily open accounts and trade online if they upload details of their Chinese identity cards.<\/p>\n

Exchanges such as Binance and MXC bar the use of yuan and only allow trading between cryptocurrency pairs, such as bitcoin versus the dollar-linked stablecoin tether (USDT).<\/p>\n

But Chinese investors can use peer-to-peer markets to buy USDT using yuan, with payment made via bank cards or online transfers. This process does not violate Chinese laws.<\/p>\n

But Chinese individuals appear to be moving capital overseas under official quotas to obtain their USDT, under the guise of making medical or other legitimate purchases, a regulatory source told Reuters. The loophole allows investors to get around China\u2019s strict capital controls.<\/p>\n

China\u2019s securities market watchdog told its regional bureaux last week to adopt tighter oversight of cryptocurrency trading, said the source, who has direct knowledge of the matter but is not authorised to speak to the media.<\/p>\n

He added that overseas-registered exchanges are outside Beijing\u2019s remit.<\/p>\n

The China Securities Regulatory Commission (CSRC) did not respond to an emailed request for comment.<\/p>\n

Huang Mengqi, a lawyer at Beijing DHH Law Firm, said regulators\u2019 inability to govern offshore cryptocurrency exchanges could blind them to potential risks.<\/p>\n

\u201cYou cannot stop people from trading bitcoin, because Chinese law recognises the value of virtual assets. Anything with value should be allowed to change hands,\u201d Huang said.<\/p>\n

The absence of data and investor information on those exchanges, however, complicates China\u2019s anti-money laundering efforts and blunts the effectiveness of capital controls, the lawyer said.<\/p>\n

In 2020, $17.5 billion worth of digital assets flowed out of Chinese exchanges to foreign venues, 53% more than in the previous year, suggesting a rise in capital flight out of China, consultancy PeckShield said in its anti-money laundering report.<\/p>\n

Changhao Jiang, co-founder and CTO of Cobo, a Chinese cryptocurrency custodian and digital wallet provider, saw a jump in business this year.<\/p>\n

\u201cChina remains a very big market for cryptocurrencies,\u201d said Jiang, whose firm\u2019s mission is to \u201cmake it easy to own and use cryptocurrencies.\u201d<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

SHANGHAI (Reuters) – Bitcoin\u2019s 300% price surge since October has revived China\u2019s grey market in cryptocurrency trading, putting regulators on alert over financial risks and […]<\/p>\n","protected":false},"author":3,"featured_media":108276,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nChina's furtive bitcoin trade heats up again, worrying regulators - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/markets\/chinas-furtive-bitcoin-trade-heats-up-again-worrying-regulators\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China's furtive bitcoin trade heats up again, worrying regulators - Fin2me\" \/>\n<meta property=\"og:description\" content=\"SHANGHAI (Reuters) – Bitcoin\u2019s 300% price surge since October has revived China\u2019s grey market in cryptocurrency trading, putting regulators on alert over financial risks and [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/markets\/chinas-furtive-bitcoin-trade-heats-up-again-worrying-regulators\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-03-01T13:41:22+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/03\/cnewsfotor51.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/markets\/chinas-furtive-bitcoin-trade-heats-up-again-worrying-regulators\/\",\"url\":\"https:\/\/fin2me.com\/markets\/chinas-furtive-bitcoin-trade-heats-up-again-worrying-regulators\/\",\"name\":\"China's furtive bitcoin trade heats up again, worrying regulators - 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