China’s crypto fans find ways to trade using tether and VPNs
Chinese crypto enthusiasts are evading Beijing’s ban on cryptocurrency exchanges using so-called virtual private networks (VPNs), according to domestic daily the South China Morning Post.
The paper said traders had begun leveraging tether, the dollar-backed stablecoin to enter and exit cryptocurrency markets enabled by a VPN – a secure system that runs across a public network such as the internet, enjoying similar security and functionality as a private network.
Armed with a VPN cryptocurrency trading counterparties can use an exchange outside of China – where such trading platforms are banned – as an intermediary to exchange digital currencies for fiat currencies and vice versa.
The South China Morning Post report says that two individuals who have completed a know-your-customer procedure with an exchange would swap fiat for tether.
It continues: “The exchange plays the role of an overseer of such trades, and stands ready to adjudicate in cases of failed trades, or transactions that are not honoured.”
So – despite the blanket ban on cryptocurrency exchanges – China’s cryptocurrency devotees have found a way to trade and there is currently no scheme in place to successfully block access to VPNs and other online resources.