On September 8, local media outlet South China Morning Post (SCMP) reported that Chinese traders are using virtual private networks (VPNs) as a tool to allow them to exchange cryptocurrency despite regulation and bans on crypto activities.
They also referenced reports which state that traders have begun leveraging stable coin Tether (USDT) as a means of entering and exiting cryptocurrency markets.
Through VPN, traders can use an exchange platform notionally registered outside of China as an intermediary to swap cryptocurrency for fiat and vice versa. The publication reports: “ 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.”
A district in Beijing has stepped up the general ban on cryptocurrency exchanges last month, to ban over 120 websites of platforms attempting to serve would-be domestic consumers.
TideBit CEO Terence Tsang told SCMP that this move is “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.”
However, SCMP mentions that to date, there has been no successful scheme in operation to block VPNs thus giving smarter traders the upper hand in maintaining access to forbidden online resources.
It comes as no surprise that traders have to resort to such tactics especially when the government has such an iron fist on regulating crypto-related activities. Chinese crypto companies had to adapt by moving overseas in order to continue their activities and now, the traders are adapting too. Some even go as far as to use Hong Kong as a home from home for platforms while others have resorted to P2P options which the government is now also trying to shut down.