Investors of digital currencies in China have found multiple ways to bypass the nationwide ban on trading with cryptocurrencies. Industry experts have said that as long as the transactions stay as peer to peer and they are decentralised, regulators won’t be able to fully block them out.
Are VPNs the Holy Grail?
The South China Morning Post has reported that many retail investors would convert their fiat into the stablecoin Tether as well as using illegal exchanges for cryptocurrency, and direct transitions between crypto wallets. All the actions are used through a VPN (Virtual Private Network) many people around the globe as it extends a private network across a public network, which allows users to send and receive data across the said public network as if their device(s) were connected to the private network directly.
The government hasn’t taken any action of yet on blocking the VPNs however, a source involved with the matter has said:
“Chinese regulators definitely have the technical ability to shut down VPNs. However, traditionally it takes numerous conversations with different stakeholders to reach a consensus on configuring a firewall, which lengthens the process.”
Companies such as Tencent have officially announced that they would ban accounts or block transactions that are related to the trading of cryptocurrencies. Although how these transactions or accounts would be identified is yet to be confirmed.
Despite all this, traders are optimistic that as long as the transactions stay decentralised and peer to peer, regulators wouldn’t be able to completely block their access.
The CEO of the centralised cryptocurrency exchange in Hong Kong TideBit, Terence Tsang, had this to say:
“The latest warning and potentially increased monitoring of foreign platforms is targeted at a batch of smaller exchanges that had claimed to be foreign entities, but are in fact operating in China claiming they have outsourced their operations to a Chinese company.”
What are your thoughts on Chinese investors finding ways to bypass the nationwide restriction? Let us know in the comments down below!