Despite the rise in control measures over cryptocurrency trading, observers are almost certain that Chinese investors will continually skirt the ban, which makes it nearly impossible for authorities to shut down trading entirely, per reports from the South China Morning Post (SCMP.)
SCMP references an earlier story published on the Shanghai Securities Times which reported that trading authorities were beefing up controls and their monitoring by blocking all access to 124 foreign crypto exchanges that provide trading services to Chinese investors. This move has had little to no effect as traders continue to use virtual private networks (VPNs) tools to access foreign exchanges, as well as leveraging Tether (USDT) for exchanging cryptocurrency for fiat currency and vice versa.
The Chinese government has been anti-crypto for a while but the most significant resistance against the industry dates back to early 2017 where Beijing began its crackdown on the domestic cryptocurrency ecosystem. These exchanges continue to circumvent the ban, reinventing themselves using new domain names under foreign identities which allows them trade to the locals.
Industry enthusiasts and investors claim that it would be difficult for regulators to completely block access as long as the trading platform servers remain outside China, transactions are conducted peer-to-peer and stay decentralized, as is common with crypto trading. The experts also believe the short-term consequences of this may be a temporary decrease in trading interest among novice cryptocurrency investors. And then subsequently, access to foreign exchange platform may be limited.
SCMP quoted a source close to one of the foreign exchanges who said regulators have the “technical ability to shut down VPNs” but there are currently no visible restrictions on using VPNs in China—which is a loophole for potential traders to access exchange platforms.
Earlier this year in March, state-run media outlet People’s Daily criticized crypto media outlets, claiming they were manipulating the cryptocurrency markets. Six months after, WeChat blocked cryptocurrency and blockchain media accounts in China claiming the accounts were found to violate the messaging apps regulations. For fear of being caught napping by regulators, Alipay and WeChat Pay said they would work with regulatory bodies in China to monitor and prohibit cryptocurrency transactions on their platforms.