For the first half of 2017, China was the center of the global Bitcoin world. Chinese exchanges like BTCChina, Huobi, and OKCoin accounted for over 90% of global Bitcoin trading volume at their peak. Chinese miners controlled the vast majority of Bitcoin’s hash rate. Chinese retail investors were voracious buyers of Bitcoin and altcoins, treating them as a way to move wealth offshore in a country with strict capital controls.
Then, on September 4, 2017, the Chinese government dropped a bombshell. It announced a complete ban on Initial Coin Offerings, declaring them illegal financial activities. Just weeks later, on September 15, the government ordered all Chinese cryptocurrency exchanges to shut down by the end of the month. BTCChina, Huobi, OKCoin — all forced to cease operations in China.
The ban was devastating in the short term. Bitcoin’s price crashed on the news. Chinese traders scrambled to withdraw their funds before exchanges closed. Some fled to foreign exchanges using VPNs. Others moved to peer-to-peer trading, meeting buyers and sellers in person. Chinese liquidity, which had been crucial to Bitcoin’s market, dried up overnight.
But in the long term, the Chinese ban had unexpected consequences. Chinese exchanges simply relocated their operations abroad. Huobi moved to Singapore. OKCoin became OKEx and moved to Malta. Binance, founded just before the ban, became an international exchange from day one. Chinese investors continued to trade crypto using VPNs and offshore accounts. The ban didn’t stop crypto in China — it just made it harder to regulate.
China’s relationship with crypto has continued to evolve. In 2021, the country cracked down again, this time targeting mining. Chinese Bitcoin miners — who still controlled most of the network — were forced to shut down or relocate. The effect was dramatic: Bitcoin’s hash rate dropped by over 50% in months, before recovering as miners moved to Kazakhstan, the United States, and other countries. China’s successive bans have never killed crypto, but they have reshaped its geography. What was once dominated by China is now a global industry spread across dozens of countries.
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