China-based digital currency exchanges have until the end of September to cease operations after Chinese authorities, spooked by the ICO craze, decided earlier this month to crack down on all exchange-based digital currency trading.
Trading volume in China has fallen dramatically since the country’s exchanges briefly halted withdrawals earlier this year as they implemented new AML controls. Now, it appears that at least some of those displaced by China’s crackdown have migrated to South Korea, which today overtook China as the third-largest market for bitcoin trading by volume.
Japan remains the largest market, followed by the US.
According to CoinTelegraph, the shift suggests that traders have moved to South Korea in response to the Chinese government’s decision to kill the exchanges. The largest exchange in South Korea is processing more transactions than Hong Kong-based Bitfinex and US-based Bittrex combined.
“The change in the processing of transactions indicates that traders have moved to South Korea. The largest exchange in South Korea has processed more transactions than Bitfinex and Bittrex.
The shift represents a substantial movement of the Bitcoin community away from China, where regulators have confirmed that all Chinese exchanges will be closed shortly.
The shift toward South Korea indicates a response to the legalization of Bitcoin in the country in recent months. A general move away from China has generally occurred, even as the country has begun to tighten its grip on the cryptocurrency market.”
While China’s crackdown triggered the largest selloff in months as investors worried that it could inspire other governments to try and suppress digital currency trading, the shift to South Korea demonstrates bitcoin’s durability. Instead of destroying a portion of the market, shuttering local exchanges simply forced traders to move elsewhere.