China's oldest crypto exchange exits cryptocurrency business amid government crackdown on Bitcoin mining
- BTCC, which ran the first
bitcoinexchange in China, has confirmed the closure of its trading businesses after a decade of operations in that space.
- While China has not banned cryptocurrency ownership at an individual level, its crackdown has severely affected the over-the-counter adoption of cryptocurrencies.
- In May 2021, China asked such institutions, including banks and online payments channels, to stop offering clients any service involving cryptocurrency.
BTCCisn't leaving the blockchain space and intends to create blockchain-based applications.
It may not be the biggest crypto exchange on the block like
The company said that it has completely exited all “Bitcoin-related businesses” due to “the [Chinese] government’s policy,” according to the South China Morning Post. Meanwhile, its stake in the Singapore-registered Bitcoin exchange ZG.com was sold to an unidentified foundation in Dubai in May 2020.
While China has not banned cryptocurrency ownership at an individual level, the country’s new level of stringency has severely affected the over-the-counter adoption of cryptocurrencies.
The BTCC will live on, just not in China
The company may be leaving China for good but its Hong Kong offshoot won’t likely be affected in any way.
It's also worth noting that BTCC isn't leaving the blockchain space and intends to create blockchain-based applications going forward. It’s also how BTCC can continue to keep one foot in the door. China may suppress decentralised finance, but it understands the value of blockchain as a technology and is focused on leveraging it for the next industrial revolution.
BTCC's decade-old story began in 2011, when it was set up by Huang Xiaoyu and Yang Linke. At one point, it claimed to be the largest crypto exchange in the world, cornering over 80% of global trade.
However, Beijing's earlier crackdown in 2017, devastated the company’s growth trajectory — forcing it to abandon crypto trading. Come May 2021, China asked such institutions, including banks and online payments channels, to stop offering clients any services involving cryptocurrency. It includes registration, trading, clearing, and settlement.
This is phase two of the exodus
China's crackdown on cryptocurrencies is an extremely decisive move as it quickly weeds out existing infrastructure. It has stopped supplying electricity to Bitcoin miners, forcing them to look for greener pastures elsewhere.
AdvertisementDespite its promise, Bitcoin is far from being used as a currency, making it easier for Beijing to phase out the decentralised network. Now, the ripple waves of the crackdown are being felt by businesses that depended on cryptocurrencies entirely.
However, unlike BTCC, many crypto exchanges that Chinese citizens were using started to exit the country early on. It includes Huobi, Binance and Okcoin.
As of today, Binance is the world's largest crypto exchange and was founded in Shanghai but quickly relocated to the Cayman Islands. Following the 2017 crisis, BTCC ultimately sold its exchange operations to an unnamed Hong Kong-based blockchain investment fund in January 2018. Although, it continued to operate with the BTCC branding to users that originated from non-Chinese IP addresses.
AdvertisementSimilar to BTTC, Huobi and Okex also started removing the ability for Chinese residents to access specific crypto services at the end of May. Huobi declared that it was discontinuing mining services to customers residing in mainland China. Despite China's reluctance, miners continued to operate in the country because cheap electricity was abundantly available. Before the crackdown, China contributed 65% of Bitcoin's total hash rate. Now, the miners are migrating to the west in search of clean and affordable energy.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
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