Chengyi Ong recalled that the Chinese authorities imposed a ban on trading cryptocurrencies back in 2021, took tough measures against mining, which prompted entrepreneurs to move to more crypto-asset-friendly jurisdictions. As a result, China has ceased to be a leader in bitcoin mining. However, attempts by the authorities of this Asian country to limit crypto trading have not been successful, says a top manager of Chainalysis.
Despite the bans, the annual inflow of crypto assets to China is estimated at $86 billion. These volumes are much lower than the level that was before the introduction of the robberies, but they exceed the figures of Taiwan and Hong Kong. There is still significant cryptocurrency-related activity in China, which means that attempts by local authorities to eradicate digital assets have failed. Changi Ong states: traders and companies simply enter the "gray markets". Therefore, it becomes even more difficult to track cryptocurrency transactions and stop illegal activities.
"There is still a lot of activity with cryptocurrencies in China. This may partly be due to a lack of transparency or weak enforcement of the ban. Another equally important factor is the decentralized nature of cryptocurrencies and peer—to—peer transactions," Ong explained.
In March, Chinese media called on local citizens to abandon cryptocurrency trading and investing in bitcoin ETFs. In February, Chinese financial regulators warned investors not to participate in ICOs, as initial public offerings of crypto assets were declared illegal in the country.