Cryptocurrency traders in China have found numerous ways to circumvent the national ban on trade in digital currencies. According to industry experts, while transactions remain decentralized and peer-to-peer, regulators will not be able to block them.
Tether and VPN as salvation
Quoting sources familiar with this issue, the South China Morning Post reports that many retail investors, in addition to illegal cryptomeria, convert their income into a stable Tether and directly exchange them between wallets with cryptocurrencies. For the purpose of protection and bypass the restrictions all online actions are performed through a virtual private network (VPN).
The government has not taken any action to block VPN, although a source noted that:
Chinese regulators definitely have the technical ability to disable the VPN. […] However, it is required to conduct numerous negotiations with various stakeholders to achieve consensus on the setting of the control process of the firewall.
Some companies, such as Tencent, officially confirmed that inhibit or prohibit the transaction account associated with cryptocurrency trading.
Despite the position of the country, local exchanges continue to conduct stable operation. As reported, the competition among them grows as they move their servers outside the country.
In response, China has implemented blocking access to 124 offshore exchanges, which led to a 33% reduction in the total volume of trade in seven popular markets.
Nevertheless, industry players remain confident that as long as transactions remain decentralized and peer-to-peer, regulators will not be able to completely block access to them. Terence Tsang, chief operating officer of a centralized crypto currency exchange in Hong Kong TideBit said:
Last warning and potentially increased monitoring of foreign platforms aimed at small exchanges, which claim to be foreign companies, but are actually in China…