Binance Defies China’s Crypto Ban, Records $90B Monthly Trading Volume: Report

Binance’s users in China traded more than USD $90 billion in a single month despite cryptocurrency trading being illegal in the country, the Wall Street Journal reported yesterday (Tuesday), citing the exchange's internal documents and former employees.

Crypto Futures Trading

According to the WSJ, most of Binance’s trading volumes in China, which accounted for 20% of its global volumes, came from spot and futures trading. According to the media publication, Binance had 5.6 million users in China as of May, out of which about 900,000 were active.

Besides China, South Korea, Turkey, and Vietnam are the other biggest markets for Binance, the publication added. The WSJ also noted that about 100,000 Binance users in China are classified as politically exposed persons (PEPs) or people holding influential positions in government.

In 2021, China imposed a ban on all cryptocurrency trading in the country. Earlier in 2017, the country banned initial coin offerings (ICOs). The ban affected Binance, which was founded in 2017 in Shanghai. However, according to the latest report, the exchange found ways to enable its users to bypass the ban.

Binance reportedly directed users to websites with Chinese domain names before redirecting them to its main website. However, the exchange has refuted the claims. According to people who spoke with the WSJ, Binance maintains that its website is blocked from users in China.

Binance’s Regulatory Struggles

Elsewhere, Binance is under scrutiny in the US. The exchange and its Chief Executive Officer and Co-Founder, Changpeng Zhao, were sued by the SEC in June for allegedly operating an illegal crypto trading platform, offering unregistered crypto asset securities, and comingling customers’ funds.

Binance is facing similar charges by the Commodities Futures Trading Commission (CFTC) for operating what the agency has termed an illegal exchange with a ‘sham’ compliance program. Besides that, Binance is under investigation by the US Department of Justice for allegations of money laundering and facilitating violations of sanctions.

On top of that, Binance is facing hurdles in expanding its business in Europe. Two weeks ago, the exchange withdrew its license application in Germany. Similarly, in June, Binance announced the decision to exit the Netherlands and transfer users to a rival cryptocurrency exchange after failing to obtain a license in the country, Finance Magnates reported.