China is Binance's biggest market despite its ban on cryptocurrency trading, report says
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- Binance is looking to new markets following an SEC lawsuit in June.
- Tokens worth $90 billion were traded on Binance in China in May, The Wall Street Journal reported.
- China is Binance's largest market, with almost 1m active users, despite cryptos being illegal.
Binance found itself all but shut out of the US after the Securities and Exchange Commission filed a lawsuit against the cryptocurrency exchange in June.
Regulatory pressure became so intense that the embattled firm even considered shutting down its American operations entirely, The Information reported.
However, Binance's prospects appear rosier in China – even though cryptocurrencies are illegal there.
The People's Bank of China banned crypto trading in September 2021 due to their potential to facilitate money laundering and destabilize the country's financial system.
Yet this doesn't appear to have deterred traders from using Binance through VPNs and foreign residency cards, The Wall Street Journal reported.
According to documents obtained by the Journal, Chinese users traded crypto assets worth $90 billion in May this year, making it Binance's largest market by far.
The exchange has 5.6 million accounts in China, with almost one million of those active, according to the internal report titled Mission Control.
"The greatest challenge that Binance faces today is that we (and every other offshore exchange) have been designated a criminal entity in China. At the same time, our opposition in the West bends over backward to paint us as a 'Chinese company,'" Binance CEO Changpeng Zhao wrote in a blog post last year.
The SEC accused Binance of violating securities laws and operating an illegal exchange in what the SEC chair, Gary Gensler, called a "web of deception". Just 24 hours after the lawsuit was filed, customers pulled almost $800 million from the exchange.
The customer flight is partly why Binance laid off more than 1,000 of its 8,000 employees worldwide last month, the Journal reported.
Binance did not immediately respond to a request for comment from Insider, made outside normal working hours.
A company representative told the Journal that the Binance.com website was "not accessible to China-based users" without elaborating.