- Despite China’s crackdown on crypto, the local population continues to find ways to evade the ban.
- Chinese police recently dismantled one of the largest illegal crypto operations in the country.
- While China intensifies its crackdown on crypto, Hong Kong is emerging as a burgeoning hub for the industry.
Years ago, the Chinese government stepped out of the crypto race by imposing a sweeping ban in 2019. Despite this, the local population has continually found ways to navigate the ban, thanks to the decentralized nature of cryptocurrencies.
Even with its illegal status, crypto trading in China remains robust. The country is still one of the largest markets in the world, generating billions of dollars through platforms like Binance and other means.
Sponsored
Yet, Chinese authorities remain unconvinced by the market’s growth and persist in their crackdown efforts. Just this week, they dismantled a major crypto ring worth billions of dollars.
China Dismantles Massive USDT Operation
Police in China’s Sichuan province have cracked open a massive underground banking operation that relied heavily on Tether’s USDT.
Operating out of Chengu, the illegal banking network facilitated transactions worth 13.8 billion yuan or $2 billion, using USDT. According to a state media report on Thursday, the police arrested 193 suspects across 26 provinces in connection with the case.
The underground USDT operation in China began in 2021 and catered to those smuggling medicine and cosmetics or looking to purchase assets overseas.
As part of its crackdown, the Chinese authorities have also frozen 149 million yuan or $20 million linked to the USDT banking operation.
While mainland China bears the brunt of the crackdown on crypto, Hong Kong, on the other hand, takes the mantle of one of the fastest-growing markets in Asia.
Hong Kong Takes Crypto Hub Mantle
Hong Kong is quickly emerging as a crypto hub, as it embraces a pro-crypto stance with clear guidelines and standards for the industry.
The Securities and Futures Commission (SFC), Hong Kong’s financial regulator, has been actively establishing a solid regulatory infrastructure for crypto trading in the country. This includes updating policies, setting stringent standards, and issuing clear warnings to ensure a secure and well-regulated market.
The response to Hong Kong’s pro-crypto legislation has been remarkable, raising the possibility that it could even influence China to adopt a similar approach. The success of crypto ETFs is expected to create a more accessible and regulated crypto ecosystem.
Reports indicate that crypto ETFs could soon be listed on the Chinese stock exchange Stock Connect. Some experts even suggest ongoing talks within the Hong Kong market to provide access to crypto investments with the Yuan.
On the Flipside
- Despite its ban on mining, China is the second largest contributor to Bitcoin’s hash rate.
- A report published by Kyros Ventures indicates that Chinese traders are among the largest stablecoin holders in the world.
Why This Matters
The dismantling of the massive USDT operation in China underscores the nation’s strict regulatory stance on crypto and its determination to enforce regulation.
Have NFTs hit a recession?
NFT Recession: 95% of Assets Drop to Zero Market Value, Report
USDC issuer Circle is moving shop:
USDC Issuer Circle Eyes Setting up Shop in US Ahead of IPO
