November has been a rough month for China. Riots in Hong Kong. Trade wars with no end, but government officials still found the time to conduct midnight raids on crypto-based companies in a full out attempt to ban all things crypto, at least all things with the exception of mining and blockchain technology. Mining brings home valuable foreign currency reserves, and President Xi had recently ordered everyone in China to jump upon anything that appeared to be an opportunity that could benefit from blockchain.
There have been several articles that have tried to fathom what is up in the Middle Kingdom, but who else could possibly assess the situation any better than the ebullient CEO of Binance, Changpeng “CZ” Zhao. Binance has grown in a few short years to be the largest crypto exchange by volume in the world. It is now based out of Malta, with exchanges across the globe, but it also has a history in China, thus making CZ an imminent expert on China and what might be the true intent of recent anti-crypto acts.
As reported by us, Bloomberg related that: “Cryptocurrencies have been on a persistent downtrend this month after China took steps to crack down on virtual-currency trading. The People’s Bank of China said this week that more than 170 Chinese platforms that offer crypto trading and initial coin offerings services have shut down. That follows an earlier report that the PBOC asked investors to be wary of virtual currencies and told businesses involved with digital assets to correct any improper actions.”
As the mayhem ensued on the Chinese mainland, The Block reported that private sources had confirmed that government officials had raided an office in Shanghai that seemingly belonged to Binance. CZ vehemently denied the veracity of the reporting, threatened legal action, and exhibited behavior the likes of which have never been witnessed from the young leader.
CZ seemed driven to the point of distraction to bury The Block’s story. Other outlets backed down, but The Block stood by its sources, claiming that: “Binance’s Shanghai office, which once hosted some of the exchange’s top executives, has abruptly closed its doors, forcing employees to either work remotely or relocate to Singapore.” CZ’s response: “That’s just pure FUD, that’s really bad irresponsible journalism. I encourage free press, and I encourage investigative journalism. But that’s just bad.”
Legal experts have opined that proving a defamation case is never an easy task, regardless of the level of resources that can be brought to bear. It appears CZ may be reconsidering his threat, based on NewsBTC reporting: “We will do everything to protect ourselves, also out users, also our BNB holders, so, we’re still evaluating about it. There are pros and cons about doing it, the costs etc… whether to sue them or not, our lawyers are still evaluating about it, we’ll see what happens. I don’t know yet to be honest.”
CZ elaborated later why he has remained detached from any association with an office in China. If you read between his lines, he is fearful of potential retributions that his associates might endure, due to his name being attached to any goings on in the mainland: “We want to be as transparent as possible, but we also want to be respectful to other people’s privacies… In business we have privacy respects as well, that’s NDA clauses when we work with certain vendors, and not certain vendors, when we invest in portfolio companies.” In other words, he wants to protect his Chinese “friends”.
AMBcrypto also reports that CZ in another interview shared his thoughts on why China is acting the way it has. CZ believes: “China is “reasonably” clear about where it stands as it intends to accelerate blockchain technology, while educating people about the same. My understanding would be, they want people to understand that the technology, just like people understand the internet because only after you have a deep understanding of it, can you come up with a very smart way to manage it.”
CZ was also pleased to see President Xi speak so publicly and so eloquently about blockchain technology. Unfortunately, the news spread like wild fire and was hyped to such an extent that surges occurred in crypto prices, in shady funding schemes in China, and in ways that forced the government to react negatively and overtly. CZ openly asserts, however, that: “Bitcoin is not banned in China, despite certain restrictions on trading and issuing ICOs in the country.”