"We're Back"- China's Largest Crypto Traders Are Relocating

How things change in crypto - in January 2017, before the crackdown by the authorities, China accounted for nearly 100% of bitcoin trading...

In the “golden era” of Chinese crypto trading, mainland operators built up considerable expertise before they were forced out of business. Some of those operators of Chinese exchanges are setting up again in “friendlier” jurisdictions around Asia, as Bloomberg reports, and their aspirations are global.

From OKCoin to Binance.com, Chinese exchanges and wallet services are seeking a second life in friendlier Asian jurisdictions as the mainland clamps down on trading and coin offerings. They’re applying for licenses in Japan - solo or via partners - setting up over-the-counter shops in Hong Kong, or laying the groundwork to operate from Singapore and South Korea. Forced out of their own home turf, the players that once dominated the world’s largest digital currency market are betting that investors harboring an insatiable demand for alternative investments will follow. Going abroad may help operators hedge risks, attract new customers and stake out other corners of the $170 billion industry.

“China used to account for a significant share of the cryptocurrency market, so we think the demand is there," said Hong Kong-based Lennix Lai, the financial market director for OKEx, which is backed by OKCoin.

 

“As formerly one of the biggest operators in China, we think we have a good chance of competing globally.”

The favourable treatment of cryptocurrencies by the Japanese authorities is a draw for some operators, according to Bloomberg. Exchange start-ups live or die by their ability to execute transactions, which is why it matters where their operations and servers are located...

Japan has emerged as a safe haven for many operators because of favorable policies: the domestic financial regulator approved 11 exchanges in September alone, with some like BTCBox already servicing a wide base of Chinese customers. The agency’s close involvement reflects a desire to root out money laundering and also prevent another fiasco like the collapse of Mt. Gox. That helped Japan regain its title as the world’s largest cryptocurrency market in past weeks. There’re at least 19 companies applying for a Japanese license. Zhao Changpeng, CEO of exchange operator Binance.com, says he too is looking for local partners and even considering acquiring an operational exchange. Others including Beijing-based Bixin have also expressed interest. Its overseas app is known as Pocket IM, a messaging service that doubles as a bitcoin wallet. The initial reception has been warm.

Quoine, a Japanese fintech company attempting to build a global liquidity platform in cryptos, is negotiating with a number of potential Chinese partners, From Bloomberg.

“We’re talking to almost all of those guys. They’re all desperate now,” said Mike Kayamori, head of Quoine, which last month won a license to operate a bitcoin exchange in the country. Kayamori expects to sign a deal with a Chinese partner by the end of the year.

 

There’s a lot of Chinese retail people reaching out to us, but we can’t handle it. So if a Chinese partner can handle all of those and they connect to us, that will be much easier.”

Singapore is another option.

Others are exploring Singapore as a backup option, though the island nation has yet to enact specific regulations. Bitmain, which operates the world’s largest mining collective, said it’s opening a regional headquarters there. Co-founder Wu Jihan said he wants to recruit talent from Southeast Asia, and tap a hub of commerce that serves as research bases for the likes of Nvidia Corp. and Alphabet Inc.

Some Chinese firms are not only going it alone, but are looking to attract business from mainland China…indirectly.

OKEx is one of those going it alone, and in Hong Kong. It wants to corral Chinese investors who’ve resorted to peer-to-peer trading over messaging apps like Telegram since the clampdown: basically Chinese investors can still buy from individuals who’ve access to overseas markets. OKEx wants to scale that by rolling out its own over-the-counter trading platform in Hong Kong. They’re now trying to recruit people to act as third-party market makers, who’ll chaperone deals, make money off a spread and then split the revenue with OKEx. Lai expects to attract customers mostly from China, Russia and the U.K.

The Bloomberg report finishes on a cautionary note...

Wherever Chinese operators end up, one thing is clear: as regulatory winds continue to shift, exchanges and other cryptocurrency players need to be nimble enough to swiftly operate and move across various jurisdictions.

...because unlike other markets these days, the problem with cryptocurrencies is volatility, both in terms of regulation and price.   

Comments

marysimmons Looney Sat, 10/28/2017 - 16:35 Permalink

Centralized governments can kick ans scream all they want but they cannot stop the decentralized digital currency tidal wave already at their shores.  It's like trying to stop Uber after everyone has downloaded the app.  The reality is that decentralized digital currencies, like BTC, and eventually decentralized everything, have the real potential to take down the endemically corrupt governmental/financial status quo that exists now, and they are finally starting to realize it.  They won't go down without a fight - when they cannot shut it down, they will try to join it and take it over, but decentralization will eventually win out.  2018 will be the year of decentralized digital currencies, and it will be epic.  

In reply to by Looney

tmosley Sat, 10/28/2017 - 14:19 Permalink

I was told that Chinese bans would be the end of crypto once and for all, and that my gold would start going up again once those pesky successful people were ground down into dust.

Obsidian Samctum Sat, 10/28/2017 - 14:19 Permalink

Its funny how the chinese always destroy industries that they dominate in. Just look at their history. “ Oh I think our people are too good at ship building, lets destroy it because we can” “ Oh I think our people are dominating the crypto space, lets destroy it”

And they want to be THE superpower? Hahahahahahahahahahahahahahahahahahagagaga

Justin Case WTFUD Sat, 10/28/2017 - 15:38 Permalink

"China’s gift to Africa.” The new headquarters of the African Union, a towering 20-storey building in Addis Ababa, Ethiopia, is so called because China picked up the $200 million tab for the state-of-the-art complex. Ethiopia’s tallest building, completed in December 2011 in time for an AU summit the following month, includes a 2,500-seat conference hall. The gift prompted Ethiopia’s late Prime Minister Meles Zenawi to refer to Africa’s current economic boom as a “renaissance,” due partly to China’s “amazing re-emergence and its commitments to a win-win partnership with Africa.”Chinese-sponsored apartments, highways, factories–and even entire cities–that are sprouting up in Africa at an astounding pace. Next to Lagos, Nigeria, Chinese developers have built a walled-off “special economic zone”–basically a separate city, with separate rules designed to attract investors–based on a model they’ve used inside China for the last 30 years. After Shenzhen became a special economic zone in the 1980s, it went from a small town of 20,000 to, by some counts, 15 million today.“Now Shenzhen’s the factory of the world,” says Hulshof. “And that special economic zone is now being tried out in Africa.”The Chinese civilization is over 5,000 years old and was considered one of four ancient civilizations of the world, along with the civilizations of the ancient Babylon, the ancient Egypt and the ancient India. The first dynasty of Chinese history started from the Xia Dynasty (2070BC-1600BC) and the last one was the Qing Dynasty (1644-1912), while the most glorious period were the Qin (221BC-206BC), Han (206BC-220), Tang (618-907) and Ming (1368-1644) dynasties. During thousands of years of feudal ruling,They know what they are doing. OBOR is also going to benefit China, while merican Gov't continues to grapple over an election that passed long ago and nothing constructive has been done on DT's watch thus far. USS Merica is listing and it doesn't look promising for the passengers as the Captain and media ponit "lok, over there".Merica has a large deficit, what have they got to show for the money? China has a large deficit, they have assets that promote economic growth and future income. Aside from Africa they have OBOR going for all of Asia. Truth sucks for the empire and it's slaves.

In reply to by WTFUD

Justin Case Obsidian Samctum Sat, 10/28/2017 - 16:12 Permalink

Hahahahahahahahahahahahahahahahahahagagaga<-------- best halloween laugh.Maybe China should throw out the CEO of USA Inc. and get things moving for the inhabitanats, rather than MSM printing bullshit for consumer consumption.China's rise to be crowned as the world's second-largest economy today is the latest milestone in a boom that has been running almost constantly since the country began the long process of embracing free-market principles more than 30 years ago.The Chinese economy has been growing at an average of almost 10% – three times the global average – since Deng Xiaoping became leader and started to introduce economic reforms. In dollar terms, its GDP has jumped from $147.3bn (£94.55bn) in 1978 to $4.9tn in 2009. Even if Japan's own economy hadn't faltered in recent months, China was expected to expand by another 10% this year so it was always likely to overtake its eastern neighbour before 2011. Some analysts argue that China is underestimating its own growth, and may be powering ahead even quicker than thought.China has recently claimed the top spot in a number of important economic league tables, as it drags the world economy out of the global downturn:• The WTO has calculated that China became the world's biggest exporter in 2009, usurping Germany. This increased the pressure on China to revalue the yuan, a move it has proved reluctant to make.• More cars are now made in China than any other country. In 2009, 13.79m vehicles were constructed in Chinese factories, comfortably exceeding Japan, with 7.93m, and the US, with 5.7m.• China is also the biggest market for new cars. Sales of new passenger vehicles leapt by more than 50% last year, pushing up total sales to 13.64m. This saw it overtake the US, where sales fell by around a fifth to 10.43m.• China became the world's largest energy user, after its appetite for power more than doubled in the last decade. Most of the demand comes from the nation's huge manufacturing operations, but its population are also using more energy as their standards of living improve, and more of them buy computers, cars and domestic appliances. According to the International Energy Agency (IEA), China consumed the equivalent of 2,252m tons of oil in 2009. China has refused to accept this, claiming the IEA's data is unreliable and stressing that it has made strides in energy efficiency.• China's energy consumption means it has taken another unwelcome title: the world's biggest emitter of carbon. It appears that China overtook the US in 2007, according to information collected for the Copenhagen summit• … but it is also spending billions of dollars on renewable energy sources. Analysts believe it doubled its wind generation capacity from 12.1GW in 2008 to 25.1GW in 2009, making it the world's largest wind market.The latest data shows that the Chinese economy grew by 9.1% in 2009, despite most of the developed world suffering a painful recession. Its GDP is still just a third the size of America's, but economists believe the two will converge within a decade. Earlier this year, PricewaterhouseCoopers (PWC) said that a "seismic change" was underway in the world economy and that China would catch America by 2020, with India and Mexico leading the stampede of emerging economies.Last year, the biggest economies were the United States, Japan, China, Germany, France, and the United Kingdom, in that order. By 2020, PWC believes the top six will read China, the US, India, Japan, Brazil, and Russia, with Germany in seventh place and the UK down in 10th.John Hawksworth, head of macroeconomics at PWC, also predicted that China would be "some way ahead of the US by 2030".China relaxed its strict communist economic policies after the pain caused by the Great Leap Forward – Mao's attempt to modernise China, which resulted in millions of deaths and derailed its economy for many years. This prompted the first wave of foreign investment into the country, since when the Chinese authorities have repeatedly intervened to rein in growth and battle inflation.

In reply to by Obsidian Samctum

Sorry_about_Dresden Justin Case Mon, 10/30/2017 - 10:39 Permalink

http://www.zerohedge.com/news/2017-10-28/visualizing-63-trillion-world-…

PRC GDP is ~$11 trillion vs. USA $16 trillion.

I am betting on renminbi/usd parity within 10 years, if not much sooner. I am workin angle with renminbi denominated savings account at Madison Ave. Bank of China in NYNY.

If this does occur my $10,000 investment will become $65,000.

I hope I am correct.

In reply to by Justin Case

Justin Case Dragon HAwk Sat, 10/28/2017 - 15:48 Permalink

Call HSBC, Wells Fargo, JPM,GS, Bank of Merica. Just tell'm El Chapo Guzmán sent ya.American-based companies registered by Mossack Fonseca, the law firm at the heart of the Panama Papers leak, casts the United States openly into an uncomfortable role: an offshore haven of corporate secrecy for wealthy business operations across the globe. Come to Nevada with that stash, yoar welcome here.

In reply to by Dragon HAwk

Barry McBear Sat, 10/28/2017 - 15:25 Permalink

The dot com bubble for this generation.Back then everyone wanted anything with a dot com at the end.  Now they want anything with a bit at the front.Idiots then, idiots now.

USA USA Sat, 10/28/2017 - 15:28 Permalink

Does anyone notice that when the Government makes somthing illegal, people find a way to do it anyway, at a much higher price $Drugs and guns come to mind!

The Greek horse Sat, 10/28/2017 - 15:30 Permalink

Ultimately this is a big set up the more and more I read from ZH I believe the big Banks will outlaw the cryptos and trap investors. Then reach the masses and tell them the Banks have had a major cyber attack  you can no longer do business as usual. In response to this Attack which they will claim the Bogey man did it and/or cryptos hackers then introduce there own CRYPTO CHIP.. all they need is NORTH KOREA OR IRAN TO BE INVADED then the ROTHSCHILD plan of a one world government with a one world digital crypto currency..  WE NEED A LOT OF THINGS TO FALL in OUR FAVOR/PLACE to avoid this world war 3. Satoshi Nakamoto invented Bitcoin Block chain technology BUT he is no where to be found I mean we know of him a very secretive individual..!!!