China’s Crypto Clampdown Assisted in Binance Exchange’s Dramatic Growth
The Dramatic Growth Of Binance Can Be Credited To The Regulatory Clampdown On Crypto Exchanges In China
It has been just been over a year since Binance was launched. Since then the rate of growth that Binance has experienced, both in terms of trading volume and capitalization has attracted a lot of attention within the cryptocurrency environment. In just a few months, the exchange grew from a fringe startup to one of the leading crypto exchanges in the world.
This sensational growth can be attributed to the regulatory clampdown on crypto exchanges in China.
When China shut down all domestic cryptocurrency exchanges in September last year, CEO Zhao quickly moved the headquarters and servers of Binance to Tokyo, outside the reach of Hong Kong and mainland regulators, and then to other markets, including Singapore and Taiwan. Chinese operators of cryptocurrency exchanges scrambled to keep up with new regulations on the mainland, which provided Binance with precious time to build up its business, according to Zhao.
Binance alleges to have made a profit of US$350 million, mostly from transaction fees, in the six months ended June 30, as it hosted trades of digital tokens from its 10 million users around the world. Although they do not attend Chinese clients, cryptocurrency exchange operators OKCoin and Huobi, both of which are based in Beijing, currently operate the next two largest trading platforms in the world for Bitcoin and other digital currencies.
Outside the mainland’s regulative extent, Zhao has been more mobile than his peers, embracing a nomadic lifestyle. During the past month alone, Zhao said he has visited eight countries – including Switzerland and South Korea – to hire new staff, attend industry events and forge deals. He has not traveled back to mainland China since the cryptocurrency crackdown a year ago.
While the Chinese government is pumping up its appropriation of blockchain, Beijing has made clear it does not want people in the country to get involved with cryptocurrency trades amid concerns of financial chaos.