Chinese find ways around crypto ban; ANZ settles debanking case

Transcript

Welcome to The Daily Forkast October 19 2021. I’m Justin Solomon of Forkast.News covering all things blockchain, filling in for Editor-in-Chief Angie Lau.

Just last month, China stepped up its crackdown on cryptocurrency, banning all transactions, including those made on crypto exchanges based outside the country. But that hasn’t stopped people from trying. We’ll take a look at how Chinese crypto users are finding ways to carry on as usual and a lot more coming up.

Let’s get you up to speed from Asia to the world.

First up, where there’s a will, there’s always a way.

In the case of China’s cryptocurrency transaction ban, that has seen people attempting to register overseas companies in order to bypass know-your-customer checks.

Forkast.News Timmy Shen takes a look.

Despite China cracking down on crypto activities with all its might, some users have been getting creative.

Beijing Business Today reports that moves by more and more crypto exchanges to stop registering new customers and phase out existing users have resulted in investors making efforts to register companies overseas, which could allow them to trade crypto as corporations.

And that has seen business opportunities emerge for intermediaries, with many vendors on China’s major e-commerce marketplace Taobao, which is owned by Alibaba, offering such services.

A customer representative at one vendor told Forkast.News that it has had clients successfully make crypto investments via an overseas company registration.

The vendor says customers can register companies in the British Virgin Islands, Marshall Islands and the UK, with fees ranging from 1,800 to 7,800 yuan. That’s around US$280 to US$1,200.

For the UK and BVI, the process takes just five to seven days, while it takes eight to 10 days for registrations in the Marshall Islands.

For Forkast.News, I’m Timmy Shen, Taipei, Taiwan.

Meanwhile, the crypto mining outflow from China to the United States continues. Crypto mining giant BitMining has announced it will cease all operations in China and invest in Ohio.

And Singapore based Atlas Technologies Group says it is expanding its cryptocurrency mining operations in the United States as well.

Forkast.News Michelle Lim has the details.

Atlas Technology has signed a multi-year deal with U.S. based cryptocurrency mining infrastructure provider Compute North.

It will see Compute North providing over 100 megawatts co-location capacity for Atlas in the U.S. – enough to power a small city.

Atlas told Forkast.News, the U.S. offers security for businesses like theirs:

“You have a lot more protection to be able to do this type of business here. Also, some of these states, such as Texas and New York, offer some of the most competitive and cheapest power rates in the entire world, so a lot of renewable energy is available here. Solar, wind, hydro – we have an abundance of that here.”

Haag says green mining and a shift to global operations are two key trends in the ASIC mining industry, and forming partnerships with large hosting companies is a strategic move:

“These hosting companies really ramped up in the previous years to be able to provide this infrastructure, and they position themselves very wisely to take on all of these migrating machines from these other mining companies.”

Atlas is also exploring expanding into Europe, South America and Africa to capitalize on the availability of renewable energy.

But Haag says the strong economy and abundance of power in the U.S. is still a big draw for many players.

For Forkast.News, I’m Michelle Lim.

And finally today – in what could set a new precedent in Australia, ANZ Bank has settled a case brought by a bitcoin trader.

Allan Flynn claimed he had been debanked because he operates a digital currency exchange. Most major banks in Australia have denied instances of debanking crypto firms, but the issue is a hot topic, forming part of the Senate inquiry into fintech regulation’s remit.

Forkast.News Lachlan Keller reports from Melbourne, Australia.

Flynn said a statement from ANZ on Twitter, in which the bank said it acknowledged the closure of his accounts could have amounted to discrimination. And it’s not the only de-banking claim Flynn has lodged.

His second against another of Australia’s largest banks, Westpac will be heard later this week.

While Australia’s banking sector has long denied allegations of the practice, there is a growing list of complaints from the crypto industry that they are being unfairly targeted.

Singapore based global payments unicorn Nium told a recent parliamentary hearing that Australia is the only country of the 40 in which it operates, that it has been debanked in this way.

A member of the board of Blockchain Australia told Forkast.News he’s hopeful Flynn’s actions will push the conversation forward.

“The fundamental issue is this myth of digital assets being all about money laundering or crime use, and banks don’t appear to be spending a great deal of time educating themselves, but are in a position where they’re able to now.”

The Senate Select Committee’s third and final report is due by the end of the month.

For Forkast.News, I’m Lachlan Keller from Melbourne, Australia.

And that’s The Daily Forkast from our vantage point right here in Asia.

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For more, visit Forkast.News. I’m Justin Solomon. Until next time.