Crypto exchanges Binance and Huobi scramble to cut ties with Chinese users after the government's ban. Here's how the crypto trading world is responding to Beijing's crackdown.


Cryptocurrency electronic cash Bitcoin banner advertisement seen in Hong Kong

Major cryptocurrency exchanges are cutting ties with investors in mainland China after the country declared all crypto-related transactions illegal.

Friday's announcement also stops foreign crypto exchanges from providing services to local residents.

In response to the ban, Binance said it's no longer accepting registrations from Chinese mobile numbers. The exchange has been blocked in China since 2017, when the country ordered local crypto exchanges to cease operations, and local users have not been able to access its domain since then.

"As such, Binance does not currently hold exchange operations in China," a Binance spokesperson told Insider. "We can also confirm that Chinese mobile phone registrations are blocked and the Binance app is not available in China for downloading."

"Binance takes its compliance obligations very seriously and is committed to following local regulator requirements wherever we operate," they added.

Chinese crypto exchange Huobi said on Sunday it would stop new user registrations by mainland customers, and retire existing ones by the end of 2021. Huobi co-founder Du Jun told Reuters the exchange took corrective measures on the same day China clamped down on digital-asset transactions.

TokenPocket, a crypto wallet service provider that was widely used in China, said in a notice on Friday it would "actively embrace" relevant regulatory provisions and end those services for mainland users that did not comply with the new laws.

China has been hostile towards cryptocurrencies for a while now, so its latest announcement didn't shock many investors, or crypto businesses. That's evident from the recent price action in the crypto market, which didn't react as much in comparison to previous clampdowns.

Kraken CEO Jesse Powell told Bloomberg on Friday the exchange doesn't have a large footprint in China, and the latest ban wouldn't have much impact on its business.

"It isn't a market that we targeted and for what it's worth; this is about the 15th time that China has 'banned bitcoin,' and they've become exceedingly efficient at it," Powell said.

Crypto exchanges might relocate to other more digital asset-friendly locations in the Asia Pacific or the Bahamas, Fundstrat strategist Armando Aguilar told MarketWatch. Coinbase doesn't have any operations in China, according to its website.

FTX CEO Sam Bankman-Fried announced Friday the exchange had moved its headquarters from Hong Kong to the Bahamas, where it established a subsidiary only last week.

"Countries that take such inflexible stances are taking significant, generational risks for their economies," John Wu, president of blockchain startup Ava Labs, said. "They can find a way to embrace these networks, or be left out of the financial infrastructure of the future."

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