Over the last month, China aggressively banned every possible crypto related trading across the country. The government even got help from industrial giants in this matter.
However, local traders always find a way to avoid bans and reach out to crypto markets, South China Morning Post reports.
Exchanges started moving their servers to different countries where crypto is not a taboo, and traders prefer “client-to-client” operations.
As a first step to avoid existing bans, traders are converting their Yuan to “Tether”, which is a stable coin backed by U.S. Dollar. They then trade their tether directly to others after completing KYC (Know-Your-Customer) procedures on exchanges individually.
Once Tether has arrived at their wallets, they use VPN (Virtual Private Network) to convert into different cryptocurrencies. The same method is applied to exit from the market.
WHY IS IT IMPORTANT?
- It is technologically possible to block VPN or ban VPN. However, it is a substantially difficult process.
- Local regulators are working on a way to encourage third party payment operators to reject transactions related to cryptocurrency trading.