Alibaba, Binance, Sparkpool and other companies are scrambling to avoid any heat from China over crypto concerns

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Alibaba, Binance, Sparkpool and other companies are scrambling to avoid any heat from China over crypto concerns
  • China reiterated its tough stance against everything crypto in a statement last week.
  • This has led to a flood of companies distancing themselves from Chinese users to avoid scrutiny by the authorities.
  • Alibaba is shutting down the sales of mining equipment and the world’s largest crypto exchanges are barring Chinese users from signing on.
China is putting the pedal to the metal to show its stance against crypto goes beyond empty threats. Global websites are getting blocked, crypto exchanges are being shut down, and mining pools are closing their doors. Companies located within and outside China are scurrying to get away from any blowback from the country’s authorities.

The recent surge in anti-crypto activity comes after a joint statement from 10 departments of the Chinese government reiterated the country’s stance on barring all crypto-related services from within its borders.

The ‘ban’, which comes among other announcements cracking down on the technology sector by the government, is making it very hard for investors within China to buy or sell the assets unless they leave the country — even though, ironically, many of crypto exchanges that exist in the world today originally came out of China, including the biggest one of them all, Binance.

Today, they are all pulling back to avoid the risk of facing any heat over crypto concerns.



Alibaba doesn’t want to invite any more scrutiny because of crypto

Alibaba doesn’t want to invite any more scrutiny because of crypto
Alibaba

China’s own tech giant has been in the dog house for a while. The tables quickly turned on founder Jack Ma when he launched his own payments platform called AliPay — a private product for the financial sector, which is mostly controlled by the government.

Not wanting to attract anymore scrutiny, the e-commerce giant announced that it will halt the sale of cryptocurrency mining equipment starting October 8 and shut down two sales categories related to mining.

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The world’s second largest Ethereum-based mining pool will shut down in two days

The world’s second largest Ethereum-based mining pool will shut down in two days
Etherscan/BI India

Alibaba doesn’t want to sell mining equipment, and Sparkpool, the world’s second largest mining pool based on the Ethereum blockchain, is closing down for good.

The company announced that it has shut its doors to users based in China, effective immediately. And, in another two days, it will be shutting down operations altogether.

Based in the Hangzhou province of China, the company accounts for an estimated 20% of the total Ethereum hash rate. Its exit could cause the hash rate to take a heavy hit in the days that follow.

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Even the world’s biggest crypto exchanges are scrambling to cut ties with Chinese users

Even the world’s biggest crypto exchanges are scrambling to cut ties with Chinese users
Binance/BI India

One of the largest crypto exchanges in China has suspended new user registration from users based in China. And, by the end of year, it plans to block existing users as well.

"Huobi Global will gradually retire existing Mainland China user accounts by 24:00 (UTC+8) on Dec 31, 2021, and ensure the safety of users' assets. We will inform users of the specific arrangements and details through official announcements, e-mails, text messages, etc," it said in a statement.

This is the second time that the exchange has taken a step to pull back its engagement in China. The exchange had previously blocked Chinese users from trading derivatives back in June when China renewed its crackdown on crypto activities.

This is in line with what Binance, the largest crypto exchange in the world, is also doing. It told Bloomberg that it doesn’t operate in China and blocks any Chinese IPs trying to access the platform.

While both of these exchanges aren’t taking in any new users from Mainland China, they are still accepting registrations coming in from Hong Kong users.

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As a result, decentralised derivatives exchange dYdX is processing more volume than even Coinbase

As a result, decentralised derivatives exchange dYdX is processing more volume than even Coinbase
dYdX's transaction volumes since April 2021CoinGecko/BI India

dYdX is the product of a former Coinbase employee Antonio Juliano. And, for him this was a big milestone.

The exchange currently has the fourth-highest ranking on CoinGecko among derivatives with the trade volume over the last 24 hours coming up to more than $10 billion — just a week ago this figure was stagnant around $2 billion.

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China FUD spells out opportunity for institutional investors

China FUD spells out opportunity for institutional investors
Cryptocurrencies flows into digital investment products as of September 24CoinShares/Bloomberg

According to CoinShares’ report dated September 27, the dip in the crypto market due to the fear, doubt, and uncertainty (FUD) created by China was an opportunity for institution investors — the whales.

Between September 20 to September 24 there was $95 million worth of inflows into digital asset investment products — a jump of 126% compared to the week before. Bitcoin was the crowd favorite accounting for $50.2 million of the total inflows with Ether coming in second with $28.9 million.

The inflows last week mark the sixth consecutive week of inflows with Grayscale dealing the charge.

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But, China isn’t giving in — CoinGecko and CoinMarketCap are now blocked for Chinese users

But, China isn’t giving in — CoinGecko and CoinMarketCap are now blocked for Chinese users
URL test on GreatFire shows both sites are blocked in China as of September 28GreatFire screenshots/BI India

The country’s ‘Great Firewall’ isn’t just blocking local publications that publish cryptocurrency news but also global players like CoinGecko and CoinMarketCap — two of the most popular crypto market data websites.

TM Lee, the co-founder of CoinGecko, told TheBlock that it wasn’t the site that was cut off from Chinese servers, suggesting that it is most likely a move by China’s internet censorship agency.

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