China’s efforts to ban the use of cryptocurrencies in the country recently received a new twist when a few weeks ago the country proclaimed that crypto transactions were illegal. At this point, users can only legally hold cryptocurrencies and do nothing else with them.
However, the ban has had other far-reaching consequences that are more indirect. One example is the fact that mainland Chinese users will soon no longer be allowed to use or even own accounts on foreign crypto exchanges.
Cryptocurrency exchanges are leaving China
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Popular cryptocurrency exchange KuCoin appears to be among the first to request that all Chinese users in mainland China have to withdraw their funds from their KuCoin accounts. After withdrawals, users will have until the end of the year to close their accounts.
KuCoin explained this in its announcement, emphasizing that this is a consequence of the People’s Bank of China decision to ban cryptocurrencies. Allowing users to stay would lead to regulatory pressure that the exchange is not equipped to deal with, so the only remaining course of action would be to ban users from using its platform.
The best the exchange can do is allow users during this three-month period to put their affairs in order and close their accounts before they are permanently shut down.
KuCoin added that it began an internal review to determine all possible courses of action, and in the end, only one was left: cut its losses and leave China for good. Or, at least, until the regulatory situation changes, which is unlikely to happen anytime soon.
As mentioned, KuCoin is the second major exchange to do this, after Huobi, which recently announced that it will stop accepting new users from China. The company also had to move $ 4 million in BTC from its mining pool, which was also a consequence of China’s ban. At the moment, only DEXs seem to be able to operate in the country, which has led some of them to prosper, specifically dYdX, which has become a reference exchange in the country.
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