Although the Chinese government has hailed their crypto ban as successful, it appears that traders have found multiple ways to circumvent the ban despite tightening scrutiny on crypto by state regulators. Exchanges are also finding ways to avoid being shut down by the government, enabling trading for Chinese citizens.
Chinese state-run newspaper, the Shanghai Securities Times, reported in late August that authorities are moving swiftly to block access to exchanges that are operating illegally, and blocked access to an additional 124 offshore exchanges providing services to Chinese citizens.
The offshore exchanges exploited weaknesses in the government’s ban by frequently changing their domain names in order to avoid detection. They also moved their servers to countries outside of the Chinese mainland, making it incredibly difficult for authorities for monitor and block the illicit exchanges.
Chinese Government Claims that Cryptocurrency Ban has Been Successful
In July, the Central Bank of China released a report that claimed that the country’s cryptocurrency ban had been incredibly successful, reducing Yuan trading activity to under 1%, while the currency once accounted for 90% of global trading volume.
Following the ban, the government moved to shut down as many high-profile exchanges, ICOs and crypto projects as possible, rapidly reducing trading volume and scaring citizens away from the markets.