China's relationship with cryptocurrency remains complex and dynamic. Despite a comprehensive ban on crypto trading and mining in 2021, underground crypto activity continues to thrive through over-the-counter (OTC) brokers, VPNs, and offshore shell companies. Platforms like Binance and OKX, though officially blocked, are still accessible to Chinese users via VPNs. These users often engage in peer-to-peer networks and OTC trading to convert yuan into stablecoins like Tether (USDT), facilitating capital flight and, in some cases, money laundering.
Binance, originally founded in China in 2017 by Changpeng Zhao (CZ), has faced significant scrutiny. CZ stepped down as CEO in 2024 after pleading guilty to U.S. anti-money laundering violations, resulting in a $4.3 billion fine and a four-month prison sentence. Despite these challenges, Binance continues to operate globally and has attracted substantial investments, including a $2 billion stake from Abu Dhabi-backed MGX, facilitated through a stablecoin linked to Donald Trump's World Liberty Financial.
The ongoing cat-and-mouse game between Chinese authorities and crypto users underscores the resilience and adaptability of the crypto ecosystem, even in the face of stringent regulations.
