Chinese Regulators Struggle to Halt Illicit Trading, Exchanges Switching Domain Names 🚨 This article is 6 years old...
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Chinese Regulators Struggle to Halt Illicit Trading, Exchanges Switching Domain Names
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Updated: Sep. 10, 2018 at 4:03 am UTC
Photo by Yiran Ding on Unsplash
The Chinese cryptocurrency ban is proving to be far more difficult for regulators to enforce than anticipated.
The Central Bank of China released a July report announcing the success of the country’s cryptocurrency ban, stating that the influence of the Chinese Yuan on the cryptocurrency market—which previously accounted for 90 percent of global trading volume — has been reduced to less than 1 percent.
More recent data published by the South China Morning Post, however, implies that China-based cryptocurrency traders are far from inactive, with many Chinese exchanges able to circumvent the ban by rapidly switching domain names in order to avoid detection as well as hosting trading platforms on servers outside of China and operating via legal entities registered offshore.
Enforcing China’s cryptocurrency ban is made more difficult by the presence of “client-to-client” trading platforms, which allow individuals to exchange fiat currency for Tether, which is then used on popular cryptocurrency exchanges outside of China that is accessed via VPNs—which are not currently restricted in the country.
To date, Chinese regulators have blocked access to a total of 124 offshore crypto-exchanges providing services to Chinese investors, but the distributed nature of the cryptocurrency trading environment makes it practically impossible to impose a total shutdown of illicit trading.
