All the previous transactions can be closed, however, no new transactions can be opened. Thus, it is not possible for new users to open contract services as they won’t be able to transfer assets to contract wallets.
Post the Chinese crackdown, the state-sponsored media in China has severely criticized high-leverage futures trading. The top four global futures exchanges have been operating out of China namely Huobi, Bybit, OKEx, and Binance. Reportedly, Huobi has been most affected from China’s policy and has completely banned new users from choosing the futures trading feature.
In a blog post last Thursday, May 27, OKEx noted that the recent crackdown only aims to bring tough policies. However, Chinese national users can continue to hold and use cryptocurrencies.
OKEx director Lennix Lai said that China hasn’t outlawed the ownership of digital currencies by its users. The crypto exchange added:
“China is going to be more strict on exchanges and mining operations, but people can still use and hold cryptocurrencies in general, including Chinese nationals.
In addition, exchanges such as OKEx have scaled back some services and products offered to Chinese nationals only. Any changes due to this notice are not impacting non-Chinese nationals, and will only affect users who reside in China and use the Chinese currency renminbi”.
Chinese Traders Flock to OTC Desks
As per the recent Bloomberg report, a large number of Chinese traders have flocked to over-the-counter (OTC) platforms. The recent report notes:
“China escalated its crackdown after a frenzied surge in Bitcoin and other tokens over the past six months heightened longstanding Communist Party concerns about the potential for fraud, money laundering and trading losses by individual investors. Yet the hard-to-trace nature of transactions on local OTC platforms and peer-to-peer networks means it will be extremely difficult for authorities to enforce a wholesale ban”.
Thus, Bloomberg notes that the recent crackdown is likely to make less impact in terms of any dip in the Chinese buying power.