Binance, which claims to be the world’s largest virtual currency exchange, was expected to leave China behind when the nation officially made cryptocurrency trading illegal back in 2021.
Two years later, clients have reported traded $90 billion worth of crypto-focused assets in China during a month. This, according to internal numbers reportedly reviewed by The Wall Street Journal as well as company employees. The transactions performed in China, Binance’s largest market, accounted for around 20% of volume globally, which does not include trades made by a subset of relatively large traders.
China’s significance for Binance has been discussed internally. This, according to the current and ex- workers of the firm. Despite the crypto trading ban, the digital asset exchange’s investigations unit works cooperatively with Chinese authorities in order to identify criminal or illicit activity among the 900,000+ users in the nation. This, according to some of the current and ex- employees of the firm.
As covered, Binance is dealing with a regulatory challenge linked in part to the opaque manner in which it does business throughout the world. The US Securities and Exchange Commission (SEC) in June filed a lawsuit against Binance and its CEO Changpeng Zhao, for operating illegally and allegedy mishandling client funds.
The US Justice Department has an ongoing investigation into Binance. Its market share among US clients has declined considerably and the firm has also fired around 1,000 of its 8,000 workers internationally.
Binance’s China presence, which was not yet disclosed, provides confirmation that the crypto firm has been able to secretly operate in areas where it is not permitted.
According to the WSJ, Binance has allegedly assisted Chinese traders with bypassing restrictions by directing them to various online sites with Chinese domain names before routing them off to the international exchange. This, according to internal documents explaining the process (and reportedly reviewed by the Journal).
The document had been distributed inside the firm prior to 2021’s ban, however, soon after that, China had blocked the exchange’s website back in 2017. But this can be easily circumvented with a simple VPN service like ExpressVPN or NordVPN, among many others that people regularly use in China because most online services like Facebook and Google are banned since a long time.