In Brief:
- The bull run crypto market has extended in China.
- Online influencers hired by crypto exchanges are encouraging customers to get in on the action with as little as 10 RMB.
- All of this occurs offshore and users must have a VPN. Crypto trading remains illegal in China.
Crypto exchanges may well be illegal in China, and the government frowns upon trading BTC and other currencies. But that hasn't stopped social media influencers from China—and the exchanges themselves—from pumping crypto this week harder than roughnecks on an oil rig. Crypto fever is sweeping the world yet again.
A recent post on social media giant Weibo for instance—“bitcoin hits $10,000 mark”— outpaced the usual assortment of celebrity news and gossip and garnered an audience of 130 million people across 4300 discussions. And many people in the different discussion threads appeared to be new to the space: “What is bitcoin? ” “What does it mean that bitcoin hits $10,000?” were common questions.
OKEx, Binance, and Huobi double down on Chinese customers
Crypto exchanges that cater to Chinese customers were using the opportunity to double-down on customer acquisition. OKEx and Binance both published posters on their Weibo accounts advertising their respective exchanges.
By contrast, Huobi didn't explicitly publish about the price milestone, and tended to focus its social media posts on blockchain technology That's because Huobi, a government favorite, firewalls its exchange business, which is domiciled offshore, from its technology software business, domiciled in China, which handles blockchain.
Still, even it got in on the recent bull run: Online influencers sponsored by Huobi were active in promoting the milestone with one “mimia_” who has over 74,000 followers, publishing a video on how to use ¥100 Yuan to buy bitcoin with the hashtag, “Purchase bitcoin on Huobi.”
Similarly, OKEx’s hired online influencer put together a tutorial video on how to purchase Bitcoin from OKEx with only ¥10 Yuan.
Crypto's dicey status in China
But aren’t cryptocurrency exchanges illegal in China?
Yes.
But that doesn’t stop the sector from thriving since owning crypto itself isn’t illegal in China; in fact, courts have affirmed its status as property.
To get around this ban, cryptocurrency exchanges fly flags of convenience of friendly jurisdictions. The transaction itself never touches Chinese soil. To access the exchange China-based users hop the Great Firewall via a VPN. Occasionally such arrangements test the limits of Beijing’s patience. In May, Binance was approved for a domestic .cn domain name for its crypto education business and things appeared to be on the mend with Chinese government. However, a month later Binance appeared to have undone this goodwill as local media discovered a Binance domain — which at the time was accessible in China — written in simplified Chinese and listing prices in RMB.
Per Binance, this was a “test site” that was “mostly used by Egyptians.” And if you believe that, we have a pyramid we'd like to sell you.
This story was produced in collaboration with our friends at Forkast, a content platform focused on emerging technology at the intersection of business, economy, and politics, from Asia to the world.
