Binance to Stop Chinese Yuan Trades and Restrict Chinese User Access

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A leading crypto exchange platform, Binance, has announced it will delist the Chinese Yuan from its consumer-to-consumer platform. This comes on the heels of an intensification of regulations regarding companies offering crypto-related services in China.

On September 24, about 10 Chinese regulators declared any crypto-related transactions in the country illegally. The bodies also threatened action against any crypto exchanges found culpable. Many suggested that as an alternative, the crypto fund would be moved offshore.

For example, Assistant Professor of Finance at Warwick Business School, Ganesh Viswanath Natraj, said, “While retail traders in China may no longer be able to access online exchange platforms that are now illegal, crypto funds may be able to move management of their funds offshore.”

However, it seems this is not to be as the crypto exchanges have started to cut down on their China connections in compliance with the regulations.

Per the announcement on the Binance website, the company will delist all customers in the CNY trading zone by 24:00 (East Eighth District Time) on December 31, 2021.

Additionally, the exchange said it would take an inventory of users on the platform. “If the platform finds users in mainland China, their corresponding accounts will be switched to the ‘withdrawal only’ mode,” the company said. Before this happens, such users will be notified via email seven days before. According to the statement, this will allow users to withdraw their earnings, redeem their assets or close open positions.

Reason for New Binance Policy Direction

The company stated that it was its policy to comply with regulations of local authorities. It explained that its latest move was also in line with that policy.

“Binance has always attached great importance to compliance obligations and has always strictly complied with the relevant requirements of local regulatory agencies,” it said.

And it isn’t just Binance exploring this route. Huobi Global Exchange has also made significant changes recently. The company relocated its operational headquarters to crypto-friendly Singapore. The firm also suspended its Chinese yuan OTC marketplace and closed all accounts with users based in mainland China.

Resultant Effect

The price of Bitcoin seems to have been affected by the announcement. As of the time of writing, Bitcoin was down by 3.25% to $55,307.75 according to CoinMarketCap. Interestingly, BNB rose by 15.88% to $460.70.

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