The Chinese government is continuing its crackdown against crypto related firms, as a number of top companies in the country are carrying outs its bidding. So far, WeChat and Baidu have done most of the crypto-culling, with the search engine removing a whole host of crypto-related forums and even altering its search engine ranking algorithms. However, it was WeChat that led the charge against the crypto industry, closing a number of popular crypto accounts including the official WeChat account of Huobi – a popular crypto exchange.
In an announcement two weeks ago, the Chinese government came out and condemned all commercial crypto activity and banned it from the country. WeChat appears to still be on an anti-crypto rampage and has closed down a number of new accounts, including the official WeChat account of Chinese crypto mining giant Bitmain.
Bitmain in the Crosshairs
Exactly why WeChat has targeted Bitmain is yet to be known, especially since the government is helping the mining giant raise money through an IPO. It was previously thought that Bitmain – a company that controls nearly half of the Bitcoin network hash rate – would remain safe from the crypto-culling. This is because it has some form of government connection, however this move from WeChat puts that into doubt.
If Bitmain was to be removed from China, the total network hash rate could fall significantly. However, it appears as if Bitmain has anticipated the crypto crackdown, as it announced plans to open a mining firm in Texas early last month. The move could be seen as a foreshadowing of its exit from China, but the new facility is still an empty lot at this point with work due to commence progress mid-2019.
Chinese Still Trading Cryptos
The Chinese public is determined to carry on trading cryptocurrencies, having turned to Tether – combined with a handful of virtual private networks (VPNs) – to do so. The VPNs mask the true location of the crypto trader and makes it appear as if they are from another country, giving them access to foreign crypto exchanges. The traders then use Tether to save money when protecting their investments during crypto corrections. As these traders will most likely not be able to pull out from an exchange and spend the fiat, they will likely look to online outlets for the ability to spend their money.
WeChat has been accused of sharing private data with the Chinese government during the crypto-culling, so it stands to reason the government has created a hit list that WeChat is simply following. China has very loose policies regarding user privacy, and the government is well known for spying and controlling its citizens internet access. While the end of the crypto-culling doesn’t seem to be in sight, we are hopefully seeing signs of a slow down.