Binance continues to attract a significant portion of its business from China, even in the face of the country’s prohibition on cryptocurrencies. In May, Binance recorded a staggering trading volume exceeding $90 billion, encompassing both spot and futures transactions originating from the country.
This data, disclosed by the Wall Street Journal and referencing the exchange’s internal system “Mission Control,” highlights the prevalence of futures trading within this volume.
What emerges prominently is the company’s unwavering gusto in maintaining a foothold within the Chinese market. This determination becomes all the more significant as the company deftly maneuvers through the intricate web of global regulatory hurdles that cast a shadow of uncertainty over the future of the entire cryptocurrency industry.
Complex Journey Amidst Chinese Regulatory Challenges
Founded in July 2017 in the bustling city of Shanghai, Binance quickly entered the cryptocurrency arena as a dynamic exchange. However, by September of the same year, China’s regulatory landscape shifted dramatically as it prohibited crypto initial coin offerings (ICOs) and imposed a blockade on the exchange’s website.
This marked the initial phase of a complex relationship between the exchange and China’s evolving stance on cryptocurrencies.
2021 witnessed a pivotal moment as China’s central bank declared all crypto-related transactions illegal, plunging the crypto industry into uncertainty. Despite the sweeping ban, Binance demonstrated remarkable agility in aiding Chinese users to circumvent the restrictions.
As revealed by the Journal, an internal document outlining the procedure shed light on how Binance discreetly directed users toward various websites with Chinese domain names before redirecting them to its primary platform.
Crypto total market cap is at $1.14 trillion on the daily chart at TradingView.com
This audacious move showcased Binance’s resolve to maintain its user base amidst a stringent regulatory environment.
Intriguing statistics from Mission Control underscore the tenacity with which Binance clung to its Chinese user base. As of May, the exchange boasted 5.6 million users coming from China, a demographic in which 911,650 users remained actively engaged.
These numbers, while indicative of the company’s appeal, also highlight the intricate balance it must strike to uphold its presence while adhering to regulatory frameworks.
Binance: Questionable KYC Methods
Media reports in March, particularly by CNBC, shed light on the innovative yet contentious approaches undertaken by Binance’s Chinese clientele. Leaked internal communications revealed that users devised strategies to bypass the exchange’s know-your-customer (KYC) systems.
The tactics, originating from Binance employees and volunteers, ranged from falsifying bank documents and addresses to ingeniously manipulating the exchange’s internal mechanisms.
In May, Binance achieved a remarkable feat by amassing a collective trading volume exceeding $670 billion, encompassing both spot trades and bitcoin futures, as reported by The Block.
Beyond its operations in China, Binance’s substantial markets extend to prominent territories such as South Korea, Turkey, and Vietnam, the Journal reported.
Featured image from Reuters