China Bitcoin and ICO Deals Continue After Government Crackdown – Reportbr>
The Financial Times newspaper is reporting that Chinese investors are still trading bitcoin and buying initial coin offerings, despite new laws that prohibit those activities.
While public exchanges are shut down, private over-the-counter markets are apparently flourishing, according to the FT report. Reminbi shares of bitcoin trading on the OTC market has gone from five percent at the beginning of September, when the crackdown started, to about 20 percent in one month, according to the National Committee of Experts on Internet Financial Security, a Chinese governemtn research group.
Bitcoin is now at an all-time high for single coin prices, undoubtedly driving the market. Several exchanges have migrated to Japan and other countries that are more open to cryptocurrency trading. But the OTC traders use encrypted messaging to continue their domestic trading, the FT claims.
Bitcoin mining is a bit more problematic. Without public exchanges, the mining companies are forced to use the OTC markets to liquidate their new bitcoins. But that market is not yet liquid enough to support large volumes of transactions.
For ICOs, Chinese investors are still investing, according to FT. But many ICO platforms are hampering them, seeking to avoid conflicts with the Chinese government regulators that have prohibited the ICO trading.