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China’s recent ban on trading and mining cryptocurrency remains a hot topic in the financial world, but Elementus CEO and co-founder Max Galka says it is too early to tell how it will impact China-based investors and their ability to invest in cryptocurrency.
“I think the jury is still out on that question,” he told Entrepreneur. “It has become an ongoing thing that China periodically announces. This may be the sixth or seventh time. And so far, it has not managed to stop anybody from really doing much of anything and people continue on operating as they normally did. I think it is very hard for a government to enforce something like this. It certainly is not going to stop people from trading crypto. They’ve gotten very used to finding ways around bans.”
He added that “a large part of what people think of as being the China ecosystem in crypto is actually located off-shore.”
Elementus, an institutional-grade crypto forensic solution, is the first universal blockchain search engine. Its enterprise blockchain platform provides real-time intelligence from blockchain data and distributed ledgers. The goal is to identify security vulnerabilities and expedite critical decision-making.
“I think mining is probably the biggest sector that could be impacted, though it’s too early to determine what exactly the effect is going to be,” Galka said. “But China is the clearly dominant country when it comes to Bitcoin mining and the largest miners in the world come from China. So if Bitcoin mining is truly now illegal, I think that is a game changer for at least that ecosystem and that it is really going to impact the entire mining industry.”
As for whether the ban is designed to further the adoption of the digital yuan, Galka said “it’s reasonable to think that they wouldn’t want other digital currencies that serve as alternatives.”
Still, he noted, “China has been putting in place bans like this for many years, since long before they were talking about creating a digital yuan, so I’m more inclined to take the explanation at face value. Each time they do a ban, it is to protect consumers and at least that’s the stated reason. And this is no exception. So I kind of feel like I take them at their word for for why the ban is taking place.”