Binance, the largest cryptocurrency exchange in the world, has announced that it will be phasing out quotation the Chinese Yuan (CNY) from its over-the-counter (OTC) trading desk.
Binance's OTC trading platform, also known as the C2C (customer-to-customer) marketplace, allows traders to place orders with self-selected exchange rates and payment methods to buy or sell cryptocurrencies with virtually any fiat currency.
“In response to local government regulatory requirements, Binance C2C will eliminate trading in CNY […] on December 31, 2021,” Binance said in an announcement on Wednesday.
In today's announcement, Binance also said the exchange is planning to review its current customer base to ensure none of them are based outside of mainland China.
According to Binance, "if the platform finds users in mainland China, their corresponding accounts will switch to 'withdrawal only' mode and users will only be able to withdraw, withdraw, redeem and close positions".
"Binance withdrew from the mainland China market in 2017 and does not engage in trading in mainland China," the exchange added.
Binance Coin (BNB), the exchange's native token, rose more than 10% after yesterday's announcement of the launch of a $ 1 billion fund to support the development of the Binance Smart Chain.
However, shortly after the news of the impending restrictions for Chinese users, the asset plunged from a local high of $ 463 to $ 434. BNB recovered shortly thereafter, however, most likely in the wake of news that Binance Launchpad later will host a token sale for the fan token of the Italian football club Lazio.
In the past 24 hours, BNB has climbed to third place on the market cap, trading hands at $ 459 at press time.
Binance joins Huobi, KuCoin
The People's Bank of China issued another blanket ban on cryptocurrency trading in September, noting that virtual currencies generate "illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes and money laundry".
Shortly thereafter, cryptocurrency exchange Huobi claimed that it blocked mainland Chinese traders from creating new accounts and that existing Chinese clients would lose access to their accounts by December 31st.
KuCoin followed suit, claiming to have closed the last remaining accounts managed by mainland Chinese residents.
Fight for users
Surprisingly, another major cryptocurrency exchange, OKEx, also made a similar announcement today. However, he did not mention any plans to restrict Chinese users from his platform, instead stating that it "does not promote and does not serve the mainland Chinese market" and that the platform's website is not accessible in mainland China.
According to OKEx, the exchange “will continue to develop steadily in the international market [and] to maintain the 'mainland Chinese market exit' policy, which also means not setting up offices and teams in mainland China.
Local cryptocurrency reporter Colin Wu drew attention to the fact that OKEx's native token, OKB, rose immediately after the warning was issued.
Wu also suggested that OKEx will not only seek to maintain its Chinese customer base, but also take over users of exchanges such as Binance and Huobi, adding that "OKB's price explained it all."
