Bybit Allows Mainland Chinese Users to Trade via VPNs, No Yuan Transactions
Dubai-based cryptocurrency exchange Bybit has confirmed that mainland Chinese users can trade on its platform using virtual private networks (VPNs), though it will not facilitate transactions in the Chinese yuan. This approach aligns with Bybit’s efforts to navigate China's stringent digital asset regulations while addressing user demand.
According to a report by the South China Morning Post, Bybit’s co-founder and CEO Ben Zhou announced on December 3 that the platform began allowing mainland Chinese citizens to trade overseas earlier this year, following significant user requests. This decision was based on the company’s assessment of "acceptable risks." However, Bybit maintains its stance against facilitating yuan-based trading to avoid what Zhou termed a regulatory “red line.”
“What the Chinese government dislikes the most about crypto is that it can facilitate capital outflow,” Zhou explained. This understanding influenced Bybit’s decision to block mainland IP addresses while enabling signups using Chinese national IDs and passports. Despite these measures targeting the overseas Chinese community, mainland residents have accessed the platform via VPNs.
Despite this development, new user growth from mainland China has been low, attributed to the prohibition on yuan transactions.
A Complicated Crypto Landscape in China
Bybit’s cautious expansion into mainland China underscores the region’s complex relationship with cryptocurrency. Once a leader in crypto adoption, China imposed a comprehensive ban on crypto-related activities in 2021 due to concerns over capital outflow and financial stability.
Despite the ban, reports indicate that Chinese users continue to access cryptocurrencies through unofficial channels like peer-to-peer trading and VPNs. In July, speculation regarding a potential lifting of the ban gained traction, with industry figures suggesting it could significantly impact the global crypto market.
Bybit’s Regulatory Ambitions
Founded in 2018, Bybit has become the third-largest cryptocurrency exchange globally by daily trading volume, trailing Binance but surpassing Coinbase. The exchange's registered user base has increased from 20 million in 2022 to nearly 60 million in 2023, indicating its growing global presence.
Bybit has faced regulatory challenges across various jurisdictions. After briefly applying for a Hong Kong license in January, the exchange withdrew its application in May due to a compliance issue involving a conflict of interest with its compliance officer. Hong Kong regulators prohibit platforms from serving mainland customers. Despite these setbacks, Zhou expressed optimism about reapplying for the license in early 2025 with an improved compliance team.
While obtaining a Hong Kong license would serve as a “confidence booster” for Bybit, Zhou noted that the city’s crypto market remains relatively small. He further explained that the primary value of the license lies in attracting talent and demonstrating compliance.