Chinese bitcoin businesses are drafting plans to escape the mainland crackdown on the digital currency, the South China Morning Post has learned.China’s biggest bitcoin exchange, Huobi, is considering shifting its operations abroad to protect its customers.“We have two paths of action [to protect] our platform,” Leon Li, founder and chief executive of the Beijing-based trading platform, told the Post. “We are trying to create an offshore account and to go international. We don’t want to touch the customer’s money in China, because maybe [regulation] is going to get worse.”Before the crackdown, customers could deposit or transfer money to or from the company’s mainland bank account.
In future, customers may have to use international bank accounts to make transactions involving an offshore Huobi account in order to bypass the mainland’s tightly controlled banking system.Li and the other heads of the five largest bitcoin businesses in China – BTC China, OKCoin, BTC Trade and CHBTC – withdrew from a global bitcoin summit in Beijing over the weekend, in order to lower the meeting’s profile.Bobby Lee, the chief executive of BTC China, said: “You can see the pressure being applied from different angles.”Lee said his Shanghai-based exchange is increasingly reliant on using paper vouchers to manage customers’ transactions in order to avoid mainland banks.
A series of crackdowns by the People’s Bank of China since December last year has seen the price of a bitcoin plunge to 2,825 yuan from 5,000 yuan during the Lunar New Year.Prices fell almost 10 per cent on March 27 alone, after Caixin’s website reported that the PBOC had ordered banks and payment companies to close accounts used to transfer money to bitcoin trading accounts.Since then, China’s biggest banks have severed ties with bitcoin trading activities. This week, the Industrial and Commercial Bank of China, the world’s largest bank by total assets and market capitalisation, ended its involvement with the digital currency, joining others who have taken similar action including China Merchants Bank, China Construction Bank, China Everbright Bank, Agricultural Bank of China and Bank of China.
Lee, a former software engineer at technology giant Yahoo, said the crackdown had negatively affected the willingness of people on the mainland to buy and sell bitcoin.“Newcomers who have heard about bitcoin who were planning to come and buy bitcoin out of curiosity, as an investment or for novelty’s sake are now thinking twice,” Lee said.Hong Cheng, managing director of Bitocean, who manufacture bitcoin cash machines, said it would also relocate “somewhere in Asia” if the crackdown persisted. He laughed off Beijing’s negative stance.“If they ban it we can move our business outside [of the mainland] but still manufacture here.
That’s not illegal. Then we sell our products and services to foreigners who want it. China is only part of the world; bitcoin belongs to the world.”
