Chinese Investors Find Gray Schemes for Cryptocurrency Trading

Get real time updates directly on you device, subscribe now.

With the ban on the circulation of cryptocurrencies in China, local investors register companies overseas in order to circumvent KYC and continue to trade.

After the Chinese authorities recognized operations with cryptocurrencies as illegal activities in the country, many companies refused to serve users from China. As a result, investors started
use gray schemes to circumvent the ban on cryptocurrency activities. Against this background, companies have emerged that offer intermediary services in registering businesses abroad for Chinese citizens.

A Beijing Business Daily journalist investigated more than a dozen companies providing such services, including American Relations Vision, Zunrong Mona Flagship Store and Dianyin.

Introducing himself as a potential client, the reporter learned from the support service of one of the companies all the details of the service provided. The intermediary offers the client to register a company in more than 200 jurisdictions, including the United States, Great Britain, Japan, South Korea, France, British Virgin Islands (BVI), Marshall Islands and many other countries.

Transaction fees range from RMB 1,200 ($ 188) to RMB 28,880 ($ 4,512). According to the service provider, it will take only 5-7 days to register a business in the jurisdiction of the UK or the British Virgin Islands. While registering a business in the Marshall Islands will take 8-10 days.

After the client submits an application in English, proof of $ 50,000 in the account, financial statement of the business, director’s name, shareholding, identity cards and signature, he receives a registered name, overseas account and details. The intermediary said that now, against the backdrop of the growth of the cryptocurrency market, many investors from China are registering foreign companies.

“After registering a business, they open an institutional account on a cryptocurrency exchange and trade cryptocurrencies.”

The mediator mentioned that there could be more customers if trading platforms did not close accounts for individual users to show that they adhere to the law. For traders who have at least 50 BTC on their account, exchanges create a separate API and continue to provide services.

Recall that 130 citizens were recently detained in China for organizing a large-scale money laundering scheme through cryptocurrencies worth over $ 130 million.

Cryptocurrency exchanges Huobi and Binance were among the first to block the registration of customers from the PRC, after the release of a notification from the Chinese authorities. Then the two largest mining pools, F2Pool and Sparkpool, were forced to deny registration to users from China due to bans by the Chinese government.

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.