Almost two years following China’s crypto ban, evidence shows that the citizens of the world’s most populous country have found ways to maneuver the system as they have kept dealing with cryptocurrency and other digital assets.
Despite China’s ban on cryptocurrency operations, the demand for these assets in the region seems to be unaffected, as reported by Bloomberg.
While the average monthly value of crypto flowing into China did drop by half in the year following Beijing’s ban, Bloomberg reports that this figure still stands at a whopping $17 billion based on data from crypto intelligence firm, Chainalysis.
Evidence for this continuous Chinese demand for digital tokens originates from various sources, including the FTX’s creditor profile and personal statements from Chinese citizens who trade on crypto platforms.
Moreover, there have also been demonstrations by industry players on strategies to bypass the crypto ban.
Chinese Crypto Ban Not Effective, Faces Compliance Issues
The collapse of the FTX exchange stands as one of the biggest crypto events of last year, plunging the market into a downward spiral which resulted in a total value loss of $200 billion.
According to Bloomberg’s report, the bankruptcy proceedings of FTX show that 8% of the defunct exchange’s customer base were Chinese citizens.
“Theoretically, crypto trading is outlawed for Chinese at home and abroad, but it’s ‘hard to enforce,'” said Jack Ding, a lawyer representing six of these Chinese creditors who have a total claim of $10 million.
“Often it’s about compliance systems at exchanges and whether they’ll filter out Chinese passport holders”, he added.
That said, one could actually debate the compliance levels of these exchanges as interviews with some Chinese investors revealed intriguing information.
Four of these investors claim to have traded on the popular Binance exchange, while one individual is said to have used the OKX exchange after the imposition of the crypto ban.
Although these transactions might have been executed using a virtual private network, these investors all claimed to have completed the exchange’s registration process using a Chinese identification.
In addition, another indication of the glaring holes in China’s crypto ban comes from reports that prominent crypto exchange Huobi once offered citizens of the Asian nation the option of accessing its platform, however, with digital identities as Dominican citizens.
Could A Ban Reversal Be On The Table?
For now, the People’s Bank Of China has not issued any comments on the evidence that Chinese citizens continue to trade cryptocurrencies.
Meanwhile, many speculate that Beijing may be mulling over a reversal of the crypto ban.
These discussions are mainly fueled by the glaring crypto-friendly stance shown by China’s special administrative region, Hong Kong, a move many believe is quietly backed by mainland China.
Moreover, the advent of more Chinese-regulatory-compliant tokens, like Conflux (CFX), is likely to create room for dialogue and prompt the government to loosen its restrictions.
By any means, if the crypto ban in China is lifted, it would result in a massive rise in the adoption levels of cryptocurrencies.