China National Radio (CNR), in its “Voice of China” podcast, has recently alleged that cryptocurrency exchange OKEx has been illegally trading bitcoin futures contracts in the country, following a ban imposed by the government last fall.
Through a piece titled “Exchanges that still prevail after the ban”, CNR claimed OKEx, a Hong Kong-based company launched by OKCoin, one of the “Big Three” trading platforms in China before the crackdown, is offering said contracts to mainland Chinese investors.
The media outlet cites two sources, Yang and Zhang, who reportedly used OKEx’s services in the country. According to the two investors, OKEx is operating in Beijing for Chinese users, and has only moved its headquarters to Hong Kong on paper. The company is, per the report, registering itself in Belize to dodge regulations.
The investors allege OKEx is trading bitcoin futures and giving investors the option to use leverage on these, while calling them “contract transactions.” The report reads (roughly translated):
“Mr. Yang, who also conducts contract transactions on the platform, told reporters that even though they are called “contract transactions,” they actually conduct digital currency futures transactions. They can use leverage to multiply the investment results…”
The report further adds OKEx runs a “point to point” operation that lets investors pay using their Alipay or Wechat accounts, bypassing China’s crypto to fiat transaction ban. The cryptocurrency exchange’s technological developments, per CNR, are still managed by the OKCoin team.
CNR notes that Yang and other investors have reported OKEx to the country’s authorities, and were told that the Financial Bureau was working on the case. It’s worth noting the Chinese media outlet’s report is part of a cryptocurrency investigation series it’s broadcasting, that yesterday claimed initial coin offering (ICO) operators are still selling tokens to Chinese investors.
Last fall, China banned cryptocurrency exchanges from the country citing “financial risks.” As recently covered, the country’s largest website have removed cryptocurrency-related ads from their platforms.
At press time, OKEx is the second largest cryptocurrency exchange by trading volume, processing $1.9 billion in the last 24-hour period.