Binance Accused of Maintaining Presence in China Despite Domestic Ban on Crypto
Following an earlier ban on initial coin offerings (ICOs) in 2017, China’s central bank tightened its clampdown on digital assets by declaring crypto-related activities illegal and enforcing a blanket ban on crypto operations in 2021. Internal records on milestones as recent as May, however, show that Binance has maintained a substantial grip on the China market.
Binance didn’t entirely abandon the Chinese market
The material cited by the Wall Street Journal on Tuesday indicated that China’s $90 billion spot and futures market volume across May make its Binance’s biggest regional market ahead of South Korea. The latter had $1.39 billion in spot volume and $56.9 billion in futures volume by comparison. Turkey, Vietnam, and the British Virgin Islands, on the other hand, ranked third, fourth and fifth, respectively.
Notably, futures trading accounted for the bulk of the monthly volume contributing $80.6 billion, per the WSJ report, which further noted that 911,650 out of its 5.6 million China-based users were active during this period.
A former employee who viewed the documents also pointed out that about 100,000 users from its Chinese customer base on the exchange as of January were ‘politically exposed persons.’ The designation refers to officials or their associates who are typically treated to more scrutiny by authorities or banking institutions due to their potential or risk of involvement in illegal financial dealings.
For context, Binance had around 128 million users globally and logged a combined spot and bitcoin futures trading volume of ~$670 billion in May. WSJ also suggested that Binance aided Chinese users in circumventing the geographical checks in place by obliquely redirecting them to the international platform. The latest report surfaces at a time Binance is facing increased regulatory scrutiny on some of the markets it operates around the globe.
Separately, the Information reported that Binance considered shutting down its US exchange subsidiary as part of a plan to protect operations on the main platforms.
The news outlet said the board of directors of Binance.US voted on ending the US business at the time of looming probes but failed to reach a unanimous agreement. Binance.US CEO Brian Shroder opposed decision which was supported by others in the board of directors in the board for which Binance CEO CZ serves as chair. Zhao declined to comment on the accuracy of the report.
Contrastingly, Binance officially marked its re-entry into the Japanese market this week – a day after the exchange’s local subsidiary received an Operational MVP license from Dubai’s regulator.
Binance debuts BNB offerings to Japanese users
Terming Japan a leader in the Web3 regulatory environment, Binance CEO Changpeng Zhao revealed during a video appearance on Asia’s leading Web3 conference WebX last Tuesday that the exchange was set to resume operations in the country.
News outlet Coinpost reported on Tuesday that Binance seemingly seeks to bolster the crypto scene in the Asian country, offering a comprehensive basket of as much as 34 tokens to customers, besting major local exchanges, including Bitbank, GMO Coin, and Coincheck.
Crypto investors will have the opportunity to choose from offerings including (SOL), Aster (ASTR), Avalanche (AVAX), and Axie (AXS), but BNB will take center stage. Binance will offer the stablecoin to customers in Japan for the first time after the digital offerings recently became regulated there.
In addition to spot trading and asset sales, the local exchange will introduce a “Simple Earn (credit crypto assets)” option and a marketplace for non-fungible tokens (NFTs).
Unlike its competitors, Binance Japan does not intend to support leveraged trading, which involves repeatedly buying and selling assets using borrowed funds, as offering this service in the country would require the firm to fulfill strict requirements to obtain a Type 1 Financial Instruments Business license. Existing clients in Japan can transfer their accounts to the local branch starting Aug 14.
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