Government Pressure Leads Chinese Cryptocurrency Exchanges to Suspend Services for Chinese Users

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Cryptocurrency exchange BitMart has decided to suspend transactions with Chinese customers due to pressure from Chinese authorities.

According to China’s Sina Finance on the 1st, BitMart announced the previous day that, following changes in Chinese government policies, mainland China has become a restricted service area, and it will no longer provide trading services to Chinese users.

BitMart also stated that the transaction suspension date is the 3rd, and existing Chinese customers will only be able to sell cryptocurrencies such as Bitcoin until then.

Even if customers do not explicitly state their nationality as Chinese, if their linked phone number and account information are associated with China, they will be considered Chinese customers and their transactions will be suspended.

BitMart, which has decided to suspend transactions with Chinese customers this time, was established in 2017 in New York, USA. However, the institution that invested in this company is Funpus Capital, a Chinese blockchain-focused venture capital, and it is recognized as a Chinese-affiliated company.

The reason why a Chinese-affiliated cryptocurrency exchange declared suspension of transactions with Chinese customers despite the expected revenue decline is interpreted as a judgment that the possibility of punishment has increased due to the Chinese authorities’ tough crackdown policy on cryptocurrencies.

Earlier, China recently declared a strong crackdown on cryptocurrency trading and a complete ban on cryptocurrency "mining."

On the 21st, the Chinese State Council held a meeting of the Financial Stability and Development Committee chaired by Vice Premier Liu He, stating, "By striking Bitcoin mining and trading activities, we must firmly block the transfer of individual risks to the entire social domain."

Since September 2017, China has completely banned new issuance and trading of cryptocurrencies. However, Bitcoin exchanges operated by Chinese capital have continued business targeting Chinese customers by relocating their headquarters offshore to places like Singapore.

Also, after pushing exchanges outside its borders, the Chinese government did not strictly regulate individual transactions by citizens, but recently shifted to a tough regulatory stance, announcing a policy to completely ban personal cryptocurrency transactions that had been conducted covertly.

Meanwhile, amid the Chinese authorities’ declaration of a Bitcoin mining ban principle, it is reported that Bitcoin mining farms in China have recently been shutting down operations to avoid regulations and are attempting to relocate equipment to other regions such as North America.

This content was produced with the assistance of AI translation services.