Chinese Government Favors Some Exchanges, Sanctions Smaller Operators
Huobi seems to be one of the best-accepted market operators, while small and unlicensed markets face sanctions.
The Chinese government has a mixed response to crypto exchanges, and there may be a differentiated approach to investigations and sanctions. Larger markets like Huobi have not faced problems, and in general trading has continued in China.
Matthew Graham, CEO of Sino Global Capital, commented on the mixed measures seen in the past weeks.
Leading exchanges may also make the backbone of recently announced “Blockchain Services Network Alliance”, a state-backed organization of crypto-related businesses. Based on Xinhua news agency reports, Huobi China will be one of the first organizations to join the Alliance. The organization will also include China Telecom, China Merchants Banks International, and Weizhong Bank, and signals the overall favorable approach to crypto organizations. At the same time, BSNA will also ensure the sector is regulated and partially state-controlled.
Binance, however, has been cautious in its involvement in mainland China, offering relatively limited side services such as an OTC desk and supporting a news service.
It also turned out Binance did not have its own representative office, and the authorities did not raid its premises. Instead, the closed office was a small sales representative team belonging to a Binance subsidiary, and the exchange itself is not in danger of censorship. Binance is registered in Malta, after moving out of its Tokyo offices citing overly-strict regulations.
News on China have swayed the crypto market mood for years, and talks of bans still cause panic. However, the country is not entirely hostile to the crypto sector, and the crackdowns are usually against small projects that directly aim to scam investors.
Mining, on the other hand, continues to be dominated by Chinese farms, which still use downstream hydroelectric power.
At this point, farms are facing the need to move to new rigs, and Bitmain may have another chance at higher sales. The S17 is yet to arrive as a mass ASIC. In the meantime, the Bitcoin hashrate fluctuated and is currently around 94 EH/s.