The Chinese ban on trading and mining has created a harsh regulatory climate for firms operating in the country. Over 20 firms in China have announced plans to relocate from the country following an even more hostile environment regarding crypto assets.
Harsh Crypto Regulatory Framework in China
China has had a harsh regulatory framework regarding digital assets for years. The country banned crypto trading earlier this year, and its authorities tend to remind players in the sector of this fact. Last month, the People’s Bank of China published a report reminding people that crypto mining and trading were illegal.
Following this announcement, many crypto-based firms started closing their operations. A local publication has stated that the number of crypto firms leaving the country is more than 20. The majority of these firms are moving to overseas markets.
Huobi, a leading cryptocurrency exchange, was among the major platforms to announce it will stop extending services to China. The exchange has already suspended the registration of new users in China while the existing users will be phased out by the end of the year.
Mining firms are also leaving the country, as Sparkpool, the second-largest Ethereum mining pool, announced it would stop new users in Mainland China from accessing the platform. The mining pool also shut down its operations on September 30.
Bitcoin is Still Bullish
Despite the Chinese government fighting cryptocurrencies with much enthusiasm, Bitcoin now seems to have overcome the negative effects of these attacks. When the ban on mining was first announced in May, bitcoin and the rest of the market nearly lost a third in value. However, even with last month’s announcement, bitcoin has remained strong, and the primary cryptocurrency is trading around $55,000, the highest levels it has attained since May.
Since the announcement by the People’s Bank of China last month, bitcoin has gained by around 25%, with some analysts stating that the Chinese ban has made the largest cryptocurrency stronger.
On the other hand, some analysts such as Katie Haun, a partner at the Andreessen Horowitz Venture Capital firm, are urging the US to support crypto and not follow what China has done. “This is an opportunity for the United States because we should be doing the exact opposite in my mind in this realm of what China is doing,” she stated.
Recent developments in the US have shown that the country does not intend to ban Bitcoin. The US Federal Reserve Chair, Jerome Powell, and the US Securities and Exchange Commission Chief, Gary Gensler, have regularly given assurances that crypto will not be prohibited.
Looking to buy or trade Crypto now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider
- How to buy ethereum
- How to buy cryptocurrency