[2018-04-04]Bitcoin Mules Flood China as OTC Cryptocurrency Trading Flourishes

[TravelMug]

Bitcoin Mules Flood China as OTC Cryptocurrency Trading Flourishes

After the Chinese government banned local bitcoin exchanges from operating in the country some industrious people have begun going abroad to buy the cryptocurrency and reselling it in China for a premium. There are now so many of these ‘bitcoin mules’ that their profit margins are rapidly declining. 

Bitcoin Smuggling

Chinese bitcoin mules are buying bitcoin in various markets around the world and smuggling it back in to the country to fuel the flourishing and unregulated OTC (over-the-counter) market, according to a report from the region. However, the business isn’t as lucrative as it was a few months ago.

John DeCleene, an assistant fund manager at Overseas Chinese Investment Management, explained: “The market’s kind of taken a downturn; It is too many players entering this market, but also less of the hype we saw in December-January, when people were paying a 30 percent premium because they expected 10 times gains overnight.”

Hedge Funds Are Getting in on the Arbitrage Action

In lieu of local exchanges, Chinese investors are turning to over the counter trading, while using social media messengers, bank wires and online payment networks. “The big Chinese traders are all using Coincola or going direct to each other through other OTC platforms,” said Christian Grewell, a professor at NYU in Shanghai.

Reuters has interviewed a mule that admitted to illegally entering the United States with up to $40,000 to buy bitcoin which she then sells on the Chinese OTC markets. “Selling and buying bitcoins on those OTC websites is the same as shopping on Taobao,” she commented.

https://news.bitcoin.com/bitcoin-mules-flood-china-as-otc-cryptocurrency-trading-flourishes/

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[Carlton Banks]

"But you can't use Bitcoin for anything"

"Now that the Chinese gangsterment has banned Bitcoin..."


Remember these naysayings?

But for some reason, regular Chinese people are still using Bitcoin (despite the so-called "ban") and presumably to their benefit, considering the risks (and the overheads, using mules sounds expensive).



Conclusion

• Banning by world's most totalitarian gangsterment == ineffective
• Still huge demand for a currency that's supposedly unusable

[1Referee]

I like how people don't let the government stop them in achieving whatever they think has value for them through crypto. It's not for nothing that after every shitty government taking serious actions against crypto the peer to peer market rockets up. It's a sign that people will take that extra bit of risk, and I'm happy for them. China the paranoid wanksta that it is has no control over this process, and people know that.

The only thing China is doing with these actions is making it difficult for itself to gain the control it so badly wants. Instead of regulating the market in an appropriate manner where they will be able to control the entire centralized crypto environment, they blatantly discarded that in an attempt to stop something that can't be stopped at all. Consequences are that right now they lost that precious control, which they can only blame themselves for. Let that be a solid warning for each government thinking it can just get rid of crypto; you are just shooting yourself in the foot.

Oh and Bitcoin mules? I actually like that.

[kevoh]

The activities of the so called ''bitcoin mules'' is a way of people fighting back the system. Chinese government can continue to regulate and ban, people will still come up with genius ways to trade (bitcoin) cryptocurrencies.

[TraderTimm]

Why you idiots keep posting news articles from bitcoin.com is beyond me.

Its Roger Ver's mouthpiece domain.

[Qartersa]

I bet this is not only happening in China. It is now that I wonder how can governments really address this matter to think that there are various ways to get away with governmental regulations. Perhaps just like corruption and illegal drugs, they can at best minimize it but not completely eradicate it. This happening should put them on notice that they should stop obsessing on banning everything that helps the general public earn because they will miserably fail at it. Rather, they should focus on good and reasonable regulation. This instance is unique because trading cryptocurrency is not bad per se. It only became one by fiction of law.