Many Exchanges in China Continue to Operate OTC Desks Despite ‘Ban’

RMB-USDT exchange rate has stabilized as the sector operates in an indefinite grey area.

article-image

Source: Shutterstock

share

key takeaways

  • China’s recent ‘ban’ on crypto was simply a reaffirmation of the lack of legal avenues for consumer protection
  • While some exchanges have signalled that they are halting new user signups and moving operations offshore, their OTC operations continue unabated

Despite reports of a ‘ban’ on cryptocurrency in China, the RMB-USDT currency pair continues to post significant volume while OTC desks remain active in the country. 

China-focused exchanges OKEX and Huobi still offer the RMB-USDT, as do Binance, KuKoin, and Gate.io. According to pricing data reviewed by Blockworks, price slippage is stable only down approximately 1% from the official RMB-USD exchange rate.

Source: OKEX being used to buy USDT from within China on Sept 28, 2021

The specific type of trade popular on these exchanges involves an OTC desk, which links together traders in a peer-to-peer fashion. The buyer would initiate a bank transfer to the seller’s designated account, and upon receipt of the transfer they would release the digital asset on the exchange. 

“In China, there’s always a way to move around things and then get back,” Tony Ling, a Hangzhou-based partner at Bizantine Capital said to Blockworks via WeChat. “In the western world, illegal means illegal. It’s direct.”

To be sure, possession of crypto and peer-to-peer aren’t illegal in China. Rather, the government pointed out with its announcement last week, there’s simply no legal codification for crypto within China so in the event of a dispute it’s not possible to use the court system to resolve things. Securities laws, however, prohibit exchanges from offering RMB-denominated crypto pairs which is why OTC is popular

Ling also noted that around China’s national holidays everything becomes more rigorous and strict. Recently, The Block reported that some of the largest portals for digital assets data like CoinMarketCap and CoinGecko are now inaccessible from within China without a VPN. 

However, other large data portals for digital asset prices like CryptoCompare and Crypto.com are not blocked in China according to GreatFire, a service to check if sites are blocked within China. 

“But you never know if, tomorrow, exchanges like OKEX will shut down and leave China forever. But until now, things are still going on,” Ling said. 

Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?Join us in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. Buy it now.


Tags

Upcoming Events

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

hivemapper.jpeg

Research

We believe crypto market participants overlook Hivemapper’s fundamental potential due to a poor understanding of both the niche map data market and Hivemapper’s positioning relative to incumbents. Hivemapper’s token model catalyzes both a cost and product advantage via unmatched map freshness and near real-time accuracy, which is its wedge into a market characterized by stale data and high data collection costs. Its current and potential future product suite may represent one of the strongest possibilities for PMF in crypto today.

article-image

Exploit shows centralization can sometimes be an asset

article-image

The Fidelity Ethereum Fund, like other proposed ETH ETFs, seeks to stake a portion of its assets, according to the firm’s Wednesday registration statement

article-image

The DAO first voted on enabling SAFE transfers over a year ago

article-image

The final Bitcoin halving, where the mining reward becomes smaller than one satoshi, is expected to occur in 2140

article-image

The Department of Justice and Commodity Futures Trading Commission announced back-to-back lawsuits against KuCoin Tuesday

article-image

Judge Failla found that Coinbase didn’t operate as an unregistered broker in offering its wallet service