Chinese traders are using virtual private networks (VPNs) as an important tool to circumvent the ongoing government repression on cryptocurrency trading, the local South China Morning Post (SCMP) release reported the 8th September.
According to SCMP, referencing reports from the Shanghai Securities Times, affiliated with Beijing, traders have begun to exploit the Tether stablecoin (USDT) as a means to enter and exit the cryptocurrency markets.
In combination with a VPN, two traders can use a fictitious exchange platform registered outside of China as an intermediary swap cryptocurrency for fiat currency and vice versa.
"[T] wo individuals who have both completed a" know-your-customer "procedure with an exchange will exchange" currencies "fiat […] in" cave ", the publication reports:
" The exchange has the role of a superintendent of such trades, and is ready to judge in case of failed trades, or transactions that are not honored. " A district of Beijing has stepped up the general ban on the exchange of cryptocurrency last month, looking to local level to ban over 120 platforms websites that attempt to serve potential domestic consumers
This, Hong Kong and Taiwan exchange TideBit CEO Terence Tsang told SCMP that "is aimed at a series of small exchanges who claimed to be foreign entities, but actually operate in China claiming to have outsourced their operations to a Chinese company. "
At the same time, the Post notes that there is currently no project of s killed to block VPNs, allowing smarter operators to keep access to prohibited online resources.
Chinese traders have pursued various encryption methods as the authorities started to crack down on the practice in September 2017, Cointelegraph reported.
These took the form of using Hong Kong as a home for the platforms themselves, while traders resorted to peer-to-peer options, something that the Chinese government has now tried to close.