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The Wall Street Journal (WSJ) has made a shocking claim about the major cryptocurrency exchange Binance. According to WSJ, despite China’s complete ban on cryptocurrencies in 2021, it continues to be the largest market where Binance operates. Internal documents indicate that Binance attracted over $90 billion in trading volume from China in May.
A Significant Portion of Binance’s Trading Volume Comes from China
Despite the illegal status of cryptocurrencies in the country, Binance continues to attract the majority of its trading volume from China. According to WSJ, based on information from Binance’s internal platform called “Mission Control,” the cryptocurrency exchange attracted over $90 billion in spot and futures trading volume from China in May. The majority of this volume came from futures trading.
Public data shows that Binance’s total spot and Bitcoin futures trading volume exceeded $670 billion in May, which means nearly one-eighth of the exchange’s volume came from China. According to WSJ, Binance’s largest markets after China are South Korea, Turkey, and Vietnam.
Binance’s Presence in China
Data provided by the internal platform called Mission Control shows that Binance had a total of 5.6 million Chinese users, including 911,650 active users as of May. Overall, the cryptocurrency exchange has more than 128 million users. WSJ stated that approximately 100,000 Chinese users on Binance were classified as “politically influential individuals” based on internal documents and a former employee.
Politically influential individuals refer to those who hold influential positions in government agencies or have close relationships with such individuals. Traditional financial institutions usually subject politically influential individuals to more scrutiny to prevent money laundering and illegal financial activities. However, it is alleged that Binance has adopted a more lenient approach to verifying the identities of its Chinese users.
After Binance was founded in Shanghai in July 2017, China banned Initial Coin Offerings (ICOs) for cryptocurrencies and blocked access to Binance’s website in September 2017. Although the People’s Bank of China declared all transactions related to cryptocurrencies illegal in 2021, WSJ reported that an internal document outlining the current procedure indicated that Binance helped its Chinese users bypass the ban by redirecting them to various websites with Chinese domain extensions before directing them to the main website. This internal document was circulated within Binance before the ban in 2021 but after China blocked the cryptocurrency exchange’s website in 2017.
A spokesperson for Binance, speaking to WSJ about these allegations, stated that the cryptocurrency exchange’s website is inaccessible in China and cannot be accessed by Chinese users.
