China’s Cheil Industries reported that cryptocurrency transactions outside the boundaries of the law are surging as the price of Bitcoin surged nearly 90% to $73,000 in less than two months. The Chinese government has banned cryptocurrency transactions since 2017.
As Bitcoin surged about 89.4% from $38,544 on January 23 to $73,000 on March 13, China’s “FOMO (fear of missing out)” people are rocking.
According to the US blockchain media The Block, the proportion of Asian investors such as Korea in Bitcoin transactions is as high as 70%. The role of Chinese investors cannot be left out here. In other words, it seems that the price has soared by Chinese consumers. In particular, on Chinese social media, many bloggers are revealing how to buy Bitcoin through overseas exchanges
To be strict, Bitcoin transactions are illegal in China. The Chinese government officially banned cryptocurrency transactions and ICOs in 2017 and started regulating cryptocurrency in earnest. However, the government did not investigate individuals’ voice transactions at the time. However, China banned all cryptocurrency-related activities in 2021 and closed all cryptocurrency exchanges and mining sites. Chinese coin bloggers point out that in order for individual Chinese investors to buy Bitcoin, they must first buy Tether (USDT) and then place an order to buy it on cryptocurrency exchanges. Tether is the world’s first stablecoin (a cryptocurrency fixed at the legal value) designed to have a 1:1 value with the U.S. dollar. In the Chinese coin world, it is unwritten by the government to trade with Tethers with low price fluctuations. CheilJaekyung said that some overseas exchanges allowed membership registration with Chinese ID cards and that even when bitcoin was actually traded, it did not request revision of location information or purchase of overseas ID. Most of the bitcoin transactions of individual Chinese investors in these overseas exchanges are conducted through C2C transactions. The platform does not keep the transaction amount by sending cryptocurrency to the buyer when the buyer agrees to the price after the seller raises the selling price on the platform. An expert in the Chinese coin industry said that this transaction method is similar to that of CNY (a used trading platform under Alibaba), the Chinese version of the carrot market. If both parties agree to the price, transactions will take place between individuals, and the platform will only take charge of monitoring. Meanwhile, the newspaper warned that cryptocurrency transactions are illegal in China and that fraudulent activities outside the legal boundaries are frequently occurring in the coin world.
SOPHIA KIM
US ASIA JOURNAL
