Binance to halt peer-to-peer trading service in China, severing final link with market amid Beijing’s cryptocurrency crackdown

The world’s largest cryptocurrency exchange says it will halt its P2P cryptocurrency trading in China by the end of the year

Move comes after the central bank warned that foreign cryptocurrency exchanges providing services to Chinese users are breaking the law

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The peer-to-peer service has enabled mainland China residents to buy and sell digital currencies bilaterally using fiat currencies such as the yuan. Photo: Reuters

Published: 8:00pm, 13 Oct 2021Updated: 10:47pm, 13 Oct 2021

Binance, the world’s largest cryptocurrency exchange that has attracted multiple warnings from regulators, said it would stop offering its peer-to-peer trading service in China by the end of 2021 in a move that would represent a clean break from a market it largely withdrew from in 2017.

The move was made “in response to regulatory and policy demand”, the company said in an announcement on its website on Wednesday. The peer-to-peer service has enabled mainland China residents to buy and sell digital currencies bilaterally using fiat currencies such as the yuan, even though Binance all but quit China in 2017 after the government cracked down hard on cryptocurrency exchanges that year.

“Since 2017, Binance has not been engaged in the exchange business in China,” it said on its website, adding that it had been focused on fulfilling its compliance obligations.

Binance’s move comes after the People’s Bank of China (PBOC) warned recently that any foreign cryptocurrency exchange that provides services to Chinese citizens through the internet is engaged in illegal financial activities.

Any people or organisations providing sales and marketing, payment settlement or technical support “who knowingly or should know that they are engaged in virtual currency related business” will be investigated in accordance with the law, the central bank said.

For Binance, which ranked as the biggest exchange among close to 300 tracked by CryptoCompare, China is just one of over 180 jurisdictions it has been providing services to.

Founder and chief executive Zhao Changpeng said in an interview with the Post in September that the top priority for the exchange is to get licences in markets that are ready to regulate the US$2 trillion cryptocurrency sector. Its most obvious attempt so far has been in Singapore, where it has applied for a Payment Service Provider licence that would enable it to offer exchange trading services in the city state.

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