Bybit Enables Mainland Chinese Users via VPN, Excludes Yuan Transactions

This move comes amid China’s strict cryptocurrency regulations, prohibiting commercial crypto activities and yuan-based transactions.

Bybit’s co-founder and CEO, Ben Zhou, confirmed during a media briefing on December 3 that the platform began accepting registrations using Chinese national IDs and passports earlier this year. Zhou clarified that while Bybit blocks mainland IP addresses, users can connect via VPNs, effectively bypassing the country’s crypto ban.

“What the Chinese government dislikes the most about crypto is that it can facilitate capital outflow. So we won’t touch this red line,” Zhou stated, emphasizing the platform’s refusal to support Yuan transactions. The decision to allow VPN access aims to cater to the “overseas Chinese community” while navigating the constraints imposed by Beijing’s policies.

Despite enabling VPN access, Bybit has reported minimal user growth from mainland China. Zhou attributed this to the platform’s strict prohibition on yuan trading, which serves as a significant deterrent for potential users.

Instead, Bybit claims to have focused on global expansion, reporting a registered user base that has supposedly tripled from 20 million in 2022 to nearly 60 million this year. However, questions remain about the platform’s heavy reliance on derivatives trading, which carries significant risks for retail investors. Its growth has also been linked to opportunistic moves, such as exploiting the vacuum left by FTX’s collapse, raising concerns about sustainability and the ethics of its strategies.

Bybit’s plan highlights the difficulty of operating in countries with strict cryptocurrency restrictions. Despite the Chinese government’s outright ban on cryptocurrency trading and mining, mainland Chinese users continue to access global crypto marketplaces via unauthorized routes such as peer-to-peer networks and VPNs.

Bybit has used this strategy to manage user demand while reducing the danger of regulatory violations. However, by allowing VPN access, the platform potentially exposes users to security risks—a concern that has led platforms like Coinbase to implement stricter measures against VPN usage.

In addition to navigating mainland China’s restrictions, Bybit has faced hurdles in obtaining regulatory approval in Hong Kong. The exchange initially sought a license under Hong Kong’s new crypto framework but withdrew its application in May due to compliance concerns. Zhou revealed that the decision stemmed from a conflict of interest involving Bybit’s compliance officer, who also held a position with a former employer.

The company plans to reapply for the license in early 2025, claiming it will address the identified issues. However, questions remain about whether such efforts are aimed at genuine compliance or merely improving its image in a regulatory environment where its credibility has already been scrutinized.

In the crypto sector, Bybit’s strategy emphasizes the continuous conflict between user accessibility and regulatory compliance. While the platform’s VPN access provides a workaround for mainland Chinese users, it also raises concerns about the broader consequences of defying state rules.

As China tightens its grip on money outflows and cryptocurrency-related activity, Bybit’s tricky approach is expected to come under more scrutiny in the near future.