Binance Makes Some Tough Calls
Keeping business alive is the number one priority for Chinese cryptocurrency exchanges right now. This is especially true for any platform that may be on the radar of the People’s Bank of China (PBoC) in connection with the recent ban on cryptocurrency ICO activity and trading. As we mentioned earlier, it was rumored Binance was one of the 60 platforms being investigated. Whether or not there were any repercussions for this exchange remains to be seen, although the company’s upcoming changes certainly indicate as much.
In a recent Zendesk update, Binance announced some big changes. First of all, several ICO tokens will no longer be traded on the platform moving forward. None of these tokens ring a bell for most people, but they have been removed at the request of the PBoC. It is good to see the company comply with these requests in such a swift manner. No one wants to invoke the wrath of Chinese government officials during these turbulent times.
For the time being, Binance users will still be able to withdraw existing coin balances. Anyone who holds HCC, LLTC, ELC, BTN, or YOYO can get their tokens out in the coming weeks. All the aforementioned ICOs still must announce their plans to refund Chinese investors. It will be interesting to see how that works out exactly. With this new “rule” regarding refunds in place, the future of ICOs in China looks pretty bleak for the time being. Proper regulation is currently being drafted, though.
Moreover, Binance made a major system upgrade a few days ago. Although some outages were caused due to maintenance, the system has been going strong ever since the maintenance was completed. It is unclear if any changes were made to Know Your Customer and anti-money laundering procedures, but that does not appear likely at this stage. After all, the exchange has no compliance issues as far as we know. The scheduled downtime was also a way to disable trading of the aforementioned ICO tokens and introduce another major change.
Perhaps the biggest shock of all is how Binance no longer allows Chinese customers to trade on the exchange. In fact, all IP addresses originating from China are now banned from participating in any major exchange activity. Chinese users can still access the user center and make withdrawals, but deposits and trades are no longer possible. This is quite an interesting decision for a company registered in Hong Kong, although the company does not expect things to change all that much.
Binance mentions that 82.5% of the exchange’s customer base is located abroad. This shows that Chinese users are a minority on this exchange. Barring them from participating in any exchange activity will hopefully allow the company to evade further scrutiny by the PBoC. There are also plans to list additional “Western coins” in the coming weeks and months. A total of five coins will be determined through a vote and added shortly.