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Crypto Traders Place Secretive Bets To Defy China’s Crackdown

Chinese investors are still in the crypto trading business despite the ongoing crackdown in the country. The recent steps taken by the Chinese government mark China’s biggest crackdown on digital asset trades since 20217, raising the bar for Bejing policies as they try to control the booming world of digital currency.

According to the data from the Chinese equivalent of CoinMarket Cap, Fexixiaohao, the crypto market is steadily in recovery since the government’s crackdown started earlier this month. China’s Yuan fell as much as 4.4% with the early warning but has recently recovered more than half of its losses.

China’s crackdown escalated into a frenzy after Bitcoin and several altcoins surged in prices over the past few months. Yet the hard peer-to-peer network coupled with the complex transaction algorithm of Bitcoin has made it difficult for the authorities to implement a wholesale ban.

The crypto market in China is no stranger to the government’s law enforcement. Before the ban on domestic exchange sites in 2017, Chinese investors owned 7% of the total Bitcoin supply in the world and accounted for 80% of mining. The ban made it next to impossible to measure the figures today, but it is abundantly clear the Chinese investors have a major presence in the market via OTC platforms and offshore venues.

OTC platforms and offshore venues have it difficult for the government to trace the transactions. OTC platforms allow traders to post bids and offers for buyers after one side agrees the buyer uses a separate platform to send the Yuan. The process shakes the traces for the authorities to follow.

The Chinese government has enforced its policies on financial institutions, ordering banks and financial firms to block suspicious activities in regard to cryptocurrency. China’s State Council has ordered to clamp down on Bitcoin in order to prevent financial risks.

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