From US Senator to Exchanges, Responses Trail China’s Crypto Condemnation

U.S. Senator for Pennsylvania, Pat Toomey, has joined in responding to China’s declaration of all crypto-related transactions in the country as illegal. 

The People’s Bank of China announced on Friday that a set of new measures including the establishment of departmental coordination have been introduced to implement efforts to further prevent cryptocurrency transactions. 

The announcement comes the same week as the crypto market wriggles out of the impact the collapse of China’s second largest real estate property developer, Evergrande, is having on the global market. 

The week saw Bitcoin’s price, as the leading cryptocurrency with the largest market cap, lost about 10% of its value according to CoinGecko. 

Senator Toomey, who had once stated that regulation by enforcement is extremely objectionable and will kill domestic innovation, terms China as “so hostile to economic freedom” that it cannot “even tolerate their people participating in what is arguably the most exciting innovation in finance in decades.”

“Economic liberty leads to faster growth, and ultimately, a higher standard of living for all,” he states in a tweet, adding that China’s crackdown on crypto is a big opportunity for the U.S. citing it’s a reminder of his country’s “huge structural advantage over China.”

Crypto businesses respond to China’s latest crackdown 

The overall crypto market cap took a hit in the past week following the major developments from China to fall below the $2 tln mark. 

While the drop could be considered to be less compared to the previous times, the market response in the past week thwarted the notion in the space that previous announcements (e.g. May 2021) had eliminated the possibility of China’s actions influencing the crypto market. 

Last week’s announcement stands out in a way because it was the first to clearly outline a coordinated attempt by key Chinese government organizations to ban Bitcoin transactions.

It’s so far seen responses in the form of panic selling across the market, and counter responses including individual efforts to downplay the ban by the second largest economy in the world to make it less effective. 

Meanwhile, there have been several reports identifying some crypto-related businesses which have fallen in line with the announced measures. They include: 

• Huobi Global, the largest crypto exchange in China, which announced that it has ceased account registration for new users in Mainland China effective September 24 and will gradually retire existing Mainland China user accounts by Dec 31. 
• Binance has not stated its stance on the development but its C2C platform which serves its RMB trading platform has added a disclaimer that the “related services and responsibilities” are now being borne by a third party, Pexpay. 
• The most widely used DeFi wallet in the Chinese region, TokenPocket, announcing that it will terminate some related functions and services for users in mainland China including third-party dApps that may be transaction-related and do not comply with regulatory documents such as notices.. 
• Spark Pool, the world’s largest Ethereum mining pool, announced that it will no longer provide services to users in mainland China due to the new policies. 
• There are also reports of Debank DeFi wallet stopping some functions and services to users in China; and Cobo, which just completed a $40 mln financing, announcing the relocation of its headquarters from Beijing to Singapore.