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Bitcoin exchanges in China

Last updated 10th May 2022
Disclosure

Chinese Bitcoin investors still wield strong influence on the market despite the 2017 and 2021 crypto ban. This article explores the methods and loopholes traders are utilising to bypass harsh regulatory conditions.

Here’s our list of top Bitcoin exchanges in China

Here are some of the top exchanges in China:

1
eToro
Minimum Deposit
$200
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
Buy crypto, or trade cryptocurrencies via CFDs
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
2
Atani
Minimum Deposit
$100
Exclusive Promotion
User Score
9
Popular among traders
Fast system for trading
Popular for beginners
3
Coinmama
Minimum Deposit
$100
Exclusive Promotion
User Score
9
Easy to use tool
High profit potential
Offers Phone Support
4
Coinbase
Minimum Deposit
$50
Exclusive Promotion
User Score
6
Trade and invest in over 25 cryptocurrencies
Extremely simple user interface
Over 68 million customers
5
Paybis
Minimum Deposit
$50
Exclusive Promotion
User Score
5
First transaction fee free
24/7 customer service
Instant payouts

What should I look for in the Bitcoin exchange in China?

With the imposition of tougher regulations on Bitcoin mining and trading, exchanges operating in mainland China had no option but to close. Major exchanges like Binance and Huobi have stopped accepting Chinese users as of late September 2021. This began in 2017 when the Chinese government banned exchanges and ICOs (Initial coin offering).

The Chinese government considers Bitcoin a speculative asset with no real backing. It points to its volatility and the impact on the financial and security stability of the country. The option of using peer to peer crypto marketplaces for retail investors remains, popularly known as OTC.

Below are the main factors to consider for crypto buyers in China:

  • Regulation: Government laws and regulations have altered the Chinese crypto landscape completely. These are the key regulations. It is illegal for exchanges to facilitate buying and selling digital assets. This also applies to the sale of cryptocurrency from overseas exchanges. Financial institutions are barred from facilitating crypto activities that include funds transfer and account opening. There is a ban on the provision of payment or advertisement services for cryptocurrency. China was known as one of the largest Bitcoin mining countries in the world. Some of the major crypto exchanges had their headquarters in mainland China. With the current ban aimed at stemming crypto mining and trading, only the use of P2P platforms make it possible to circumvent these laws.

  • Fees: P2P platforms levy charges including escrow, transaction and payment processing fees. Investors avoid deposit and withdrawal fees associated with centralised exchanges.

  • Geo-restrictions: Centralised exchanges have been banned from China. The government prohibits its citizens from using these platforms to conduct crypto trades. Global P2P marketplaces like Paxful are available because the regulations do not clearly outlaw them.

  • Payment Options: P2P marketplaces provide various payment options, including WechatPay, AliPay and bank transfers. Buyers are likely to prefer these methods because they are readily acceptable to individuals in China.

How to get started with Bitcoin exchange in China

Since P2P marketplaces are the prominent option for Bitcoin purchase in China, we look at the steps to open an account and make a purchase.

  • Open an account: This will require email or phone number and a password. Users will need to verify their email or phone number. We recommend the use of alias emails for Chinese users.

  • Browse the advertisements on the platform: The filter option gives you the ability to customise the search. Investors can select their preferred payment method, number of Bitcoins, amount of money and reputation of the seller.

  • Initiate the exchange: Once the buyer finds a suitable seller, initiate the trade via the chat feature. Understand the trade terms and agree with the seller.

  • Execute the trade: An escrow service on these platforms comes in handy. It protects both the seller’s Bitcoins and the buyer’s fund. Once the money transfer is complete, the seller releases the Bitcoins.

  • Storage: We recommend the storage of Bitcoins in a hardware wallet. Examples of good wallets include Trezor and Ledger.

What options do I have to buy and sell Bitcoin in China?

With the current ban on mining and trading cryptocurrency in China, all exchanges have ceased their operation in the country. The first ban came in 2017 where exchanges like OKEx suspended their trading platforms, and the apps were no longer downloadable.

Buyers in China are still using various means to bypass the existing laws.

  • Use (virtual private networks) VPN services: VPN services are also banned and blocked in China. However, as with the case with private networks, it is impossible to block all of them. e.g. , NordVPN. These softwares help mask the IP address of your device (computer, tablet or smart phone). This makes it cumbersome to monitor the online activity of a device. Although illegal, investors can open accounts and fund accounts overseas. Exchanges like Binance are a good option due to the less strict KYC requirements on smaller purchases.

  • Use of intermediaries: Vendors of online e-commerce apps such as Taobao help Bitcoin investors establish legal entities offshore. Regions and territories like Marshal Islands, the UK and the British Virgin Islands are favoured due to their friendly laws These registered entities assist investors make Bitcoin purchases.

Do I have to pay tax when selling Bitcoin for profit in China?

There is a blanket ban on crypto activities in China. Cryptocurrency trading is deemed illegal, but there are no tax regulations.

Conclusion

China is one of the prominent countries that has banned Bitcoin trading. Given the significant crypto market and mining activities in the country, it was only natural for investors to seek alternatives, including the use of intermediaries.

FAQs

What is an exchange?
Can I buy and sell Bitcoin with ID on exchange?
Are exchanges legal in China?
What is the difference between an exchange and a broker?Bitcoin exchanges in China

Amala Pillai

Amala Pillai

Amala is custom content and news editor based in London. She is a former financial journalist based in Singapore with 7 years of experience covering a range of business and financial topics. Now she focuses on crypto and macro-economics. She has also covered feature profiles, tech, business politics and ESG— she was the Environment Editor for the Solutions Newspaper, 2016 and worked in an editorial capacity at both News corp (Dow Jones) and JBN. She also has experience as a content creator, strategist and brand editor for various financial institutions and banks.