Binance, the largest cryptocurrency exchange platform, has announced the halt of over-the-counter trading of the yuan for Chinese citizens. This action by the exchange is in compliance with the local crypto regulations.
In the announcement, Binance stated that it would halt servicing OTC trades made with the Chinese yuan by December 31, 2021. This announcement led to a dip in most of the market, with Bitcoin falling to below $55K.
Halting its Services in China
In the announcement dated October 13, Binance further noted that it would start an analysis of all the users on its platform, and the accounts of users based in Mainland China will be restricted to withdrawals only. Hence, these traders will not be able to make any purchases but only have the option of liquidating their positions and withdrawing funds from the exchange.
Binance stated that the ongoing crypto regulatory crackdown had influenced its latest decision in China. This year, China has taken a harsh stand against cryptocurrencies by declaring a crypto trading and mining ban. Last month, China’s central bank issued a reminder of this restriction.
This ban also stated that all local businesses in China are barred from transacting with companies that operate in the digital asset sector.
Crypto Firms Migrating from China
In May, after China cracked down on mining activities, many mining firms halted their operations in the country and moved overseas. A similar situation is currently happening where crypto trading firms are also leaving the country to focus on overseas markets.
More than 20 firms in China have now stopped offering services in the country. Huobi, another leading exchange, had earlier issued a notice barring the registration of new users based in Mainland China and added that existing users would be barred from accessing the exchange by the end of the year. KuCoin has also closed its local shop in China.
Colin Wu, a local journalist, also recently tweeted that WeChat, the most used social media platform in China, blocked searches related to cryptocurrency exchanges. In his tweet, Wu further noted that “almost all websites and apps in China have blocked or will block exchanges.”
Developments in China regarding the crypto space usually affect prices. Currently, tokens of decentralized exchanges such as PancakeSwap have gained in value following Binance’s announcement.
However, the rest of the market is mainly trading in the red zone. Before the Binance announcement, Bitcoin was trading at $56,000 before dipping to $54,000. It has since shown signs of stability at $55,000.
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