China has banned cryptocurrency, yet Binance manages to conduct a substantial $90 billion worth of business in the country regardless

China has banned cryptocurrency, yet Binance manages to conduct a substantial $90 billion worth of business

Binance, the world’s largest cryptocurrency exchange, was expected to leave China when the country prohibited cryptocurrency trading in 2021. However, despite the ban, internal figures indicate that users traded around $90 billion worth of cryptocurrency-related assets in China within a month. This makes China Binance’s most significant market, accounting for 20% of its global volume, excluding trades made by a subset of very large traders.

The importance of China to Binance is openly acknowledged internally, and the exchange’s investigation team collaborates with Chinese law enforcement to identify potential criminal activities among its more than 900,000 active users in the country.

Binance’s operation in China, which was previously undisclosed, demonstrates how the company has managed to operate discreetly in places where it is officially unwelcome. The exchange has assisted Chinese users in circumventing restrictions by directing them to visit different websites with Chinese domain names before rerouting them to the global exchange.

While Binance’s footprint in China remains essential for its business, it is currently facing regulatory challenges worldwide, including lawsuits and investigations related to its operations. Despite these hurdles, Binance continues to process a substantial number of cryptocurrency transactions globally.

The relationship between Binance and China has been complex, with the company’s founder, Changpeng Zhao, originally establishing the firm in Shanghai in 2017. However, after facing regulatory attacks, Binance shifted its operations to Japan, yet still maintained staff in China.

Following China’s expanded clampdown on cryptocurrency in 2021, Binance’s China business initially declined, but it later recovered, and trading volumes remained high. Chinese customers continue to use VPNs to access exchanges banned in their country, contributing to Binance’s active user base in China.

Despite the ban, Binance has been relatively lenient in verifying the identity of its Chinese users, with less than half of them having undergone know-your-customer checks after the 2021 ban.