Cryptocurrency Trading Using VPNs Despite Government CrackdownSeptember 10, 2018
South China Morning Report reported that Chinese Traders are continuing to trade cryptocurrency despite the government crackdown and ban on cryptocurrency trading.
Virtual Private Networks (VPNs) are used by Chinese Traders to continue their cryptocurrency trading.
Beijing-Affiliated Shanghai Securities Times as been referenced by the SCMP, and they have to report that Chinese Traders have begun to leverage Stable Coin Tether (USDT) in order to be able to enter and exit the cryptocurrency market. This was after China banned every kind of commercial venue from hosting events related to cryptocurrency.
In combination with the Virtual Private Networks (VPN) traders will be able to make use of exchange platforms that have been registered outside China and as well make use of an intermediary in order to swap the cryptocurrency for the fiat currency.
The publication has to report that “[T]wo individuals who have both completed a ‘know-your-customer’ procedure with an exchange would swap ‘fiat’ currencies […] to tether,”
The publication also added, “The exchange plays the role of an overseer of such trades, and stands ready to adjudicate in cases of failed trades, or transactions that are not honoured.”
More than 120 websites that function as a cryptocurrency platform that was trying to serve the prospective domestic customers were banned following the step up of the Beijing district to execute the overall ban on the cryptocurrency.
The reasons provided by the government for justifying the measures were to, “protection of public property rights, prevention of money laundering, and upholding the security and stability of the financial system.” The public were required to denounce activities that violate the new ban.
Despite, Chinese traders are trying to get access to Initial Coin Offerings via loop holes for their crypto-related activities.
Following regulations, several cryptocurrency related accounts that were suspecting of publishing ICO and crypto trading related information in a hype to provide with information and offerings in violation of the new regulation were permanently blocked.
The Shangai Securities Time, have identified more than 124 crypto trading platforms that consisted of overseas IP addresses in order to block the access of Chinese traders to these overseas crypto services to Chinese traders.
Terence Tsang, CEO of the Hong Kong and Taiwan exchange TideBit told to SCMP, “targeted at a batch of smaller exchanges that had claimed to be foreign entities, but are in fact operating in China claiming they have outsourced their operations to a Chinese company.”
Since, smarter restrictions have not yet been imposed on Virtual Private Networks, smarter cryptocurrency traders would manage to gain access to the online resources and they will continue with their cryptocurrency trading.
Ever since the ban on the crypto trading, the traders from China have been continuing with various means of crypto trading despite the crackdown since September, 2017.
Traders initially resorted to peer-to-peer options; however, the Chinese government ultimately cracked down on the option as well. Eventually Hong Kong is now being tried as a platform for trading.