Binance has reportedly closed its Shanghai office, where over 100 staff, including senior management, were employed, following a raid by Chinese law enforcement, according to sources cited by The Block.
Binance Denies Office Raid
Binance has moved to deny reports of the raid after CEO and Founder Changpeng Zhao tweeted just yesterday that offices are an outdated and antiquated concept. However, Chinese authorities recently issued a notice to the public directing individuals to report businesses engaged in virtual asset trading to the country’s central bank, the People’s Bank of China, which is also headquartered in Shanghai. The notice read:
“Virtual currency transactions in the territory; the other is to issue ‘xx coins’ and ‘xx’ in the form of ‘blockchain application scenarios.’ Currency, fundraising or bitcoin, virtual currency such as Ethereum; third, providing services such as publicity, diversion, agency trading, etc. for registered ICO projects, virtual currency trading platforms, etc.” Binance has said that the company had not received this notice.
China’s Changing Crypto Stance
China had appeared to be embracing blockchain technology recently, following comments by President Jinping Xi. However, it appears as though the government is cracking down on crypto trading, which is outside of its jurisdiction, as it concentrates its efforts on developing its own, centralized digital asset on blockchain, going against the core purpose of the technology. Bitcoin made gains earlier this month after China announced that it would be scrapping its ban on crypto mining; however, Binance looks to be a major casualty of more stringent rules.
Markets Take a Beating
The raid on the Binance office and ongoing crackdown on cryptocurrencies in China has had negative implications for the market. Bitcoin is down over 6% to $7,591 USD, while leading altcoin Ethereum (ETH) has lost over 8% in the last 24 hours. Altcoins such as Litecoin (LTC) and EOS are taking a hammering, with over 9% losses, while Binance’s own coin, Binance Coin (BNB), is down 10% at the time of writing to $16.58.
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