Written by: Black Mario

This article is the result of five days of research and extensive data analysis, outlining the development history of Chinese cryptocurrency exchanges. It aims to review the transformation of Chinese cryptocurrency exchanges from their initial, undeveloped stages to their global reshaping. I believe this is also a history of the industry, intertwined with technological ideals, wealth frenzy, regulatory shifts, and global migration.

From BTC China, born in a Shanghai residential building in 2011, to the three-way battle between Huobi and OKCoin in 2013; from RMB trading once dominating the global Bitcoin market, to the "September 4th" regulations in 2017 bringing the golden age of domestic exchanges to an abrupt end; from platforms like Binance, HTX, and OKX shifting to offshore markets, to the compliance reshaping under the era of strong regulation, the story of Chinese exchanges almost encapsulates the entire process of the crypto industry moving from chaos to order.

Along this path that has lasted for more than a decade, some have gone from internet cafes and private homes to the world stage, some have reached the top of the global market during bull and bear markets, some have sold off their assets and left the market, some have retreated to the background, and some have been searching for a ticket to enter the mainstream financial system again under heavy regulatory pressure.

Ready? Let's embark together from that unmarked Shanghai residential house and retrace the wild, frenzied, overseas expansion, and compliance journey of Chinese stock exchanges.

01 The Wilderness Begins

During Shanghai's plum rain season in 2011, the humidity and heat were unbearable. In a small residential house of less than 20 square meters in Jing'an District, there wasn't even a decent sign. Two peeling computer desks and a second-hand printer that was stuck with paper were all the belongings of China's earliest cryptocurrency exchange.

Yang Linke stared at the characters flashing on the screen, a cigarette dangling from his lips, while Huang Xiaoyu typed the last line of matching code. Neither of these two young men, struggling on the fringes of the internet, could have imagined that they were opening a wild door that could sweep across the globe.

Back then in China, no one considered Bitcoin a legitimate business. This string of virtual code from overseas was only hidden in the corners of geek forums. And the story of Chinese cryptocurrency exchanges quietly began with these two young men with completely different backgrounds and personalities.

Yang Linke is a native of Wenzhou, born in 1985. He never followed the conventional path of education. He dropped out of school in his teens to make his way in the world, working as a network administrator in internet cafes in Wenzhou and Shanghai. His most authentic youth was spent sitting in front of computers filled with the smell of smoke, repairing machines, fixing problems, and watching players play games. Later, he dabbled in virtual items and built small websites, but he didn't make a lot of money. However, he developed a keen eye for niche needs.

He didn't understand cryptography, nor had he been exposed to overseas geek circles. When he first saw "Bitcoin" on a tech forum in 2010, he keenly realized that it was a virtual token that could be transferred online and was not controlled by anyone. A simple thought immediately popped into his head: if people play with it, then people want to buy and sell; if there is buying and selling, then there needs to be a place to facilitate the transaction.

At that time, even over-the-counter Bitcoin trading was extremely rare in China. Buyers and sellers had to post on forums, transfer money privately, and manually transfer coins, which was cumbersome and dangerous, much like how passersby would exchange vegetables on the roadside before there were any markets. Yang Linke saw this untapped market opportunity, but he had no technology or team. The only thing he could do was find someone who could code to partner with him.

The person he found was named Huang Xiaoyu.

Unlike Yang Linke, who came from humble beginnings, Huang Xiaoyu is a well-known tech geek in the industry. He has been deeply involved in programming for many years, specializing in website development and backend construction. He was also among the first in China to understand the underlying logic of Bitcoin. He is introverted and doesn't like to show his face. He is only obsessed with code and decentralized technology. When Yang Linke found him on a forum and bluntly said, "I'll do the operations, you write the code, let's build a Bitcoin trading website together," Huang Xiaoyu agreed almost without hesitation.

Perhaps it's not about making big money, but about that obsession in the hearts of geeks—such a cutting-edge thing deserves a trading platform of its own for Chinese people.

The two pooled together tens of thousands of yuan in start-up capital, rented this residential office, and had no investors, no formal employees, and no legal permits. They spent their days writing code and debugging web pages, and their nights driving traffic to forums. When they were hungry, they ate instant noodles, and when they were tired, they slept on their desks. In June 2011, Bitcoin China (BTCC) was officially launched. It was China's first cryptocurrency exchange and one of the earliest trading platforms in the world.

The early BTCC website was extremely rudimentary, displaying only the most basic order book and price curves, lacking even candlestick charts; it only allowed trading in Bitcoin. Deposits and withdrawals were entirely manual. Users transferred money to Yang Linke's private bank account, which he manually verified before adding the corresponding amount of Bitcoin. Withdrawals involved users submitting requests, which Huang Xiaoyu then manually transferred the Bitcoin one by one.

The first batch of users numbered only a few hundred, all of them programmers, geeks, and overseas students, with daily transaction volume barely reaching tens of thousands of yuan. Yang Linke later recalled that at that time, he never thought about making money; he just felt that he had done something very cool, like building the first path in a no-man's land.

Two ordinary people, one with a bold vision and the other with a decisive action, set up the first tent for a stock exchange in China in the wilderness.

This grassroots geek website remained lukewarm for two whole years after its launch, never really breaking out of its niche. Then, in 2013, an elite from overseas entered the scene, completely rewriting BTCC's fate. His name was Li Qiyuan.

Li Qiyuan's life is completely different from that of Yang Linke and Huang Xiaoyu.

He studied in the United States in his early years, graduated from Stanford University, and worked in Silicon Valley technology companies and Wall Street institutions. He is familiar with overseas financial markets, media operations and business strategies, and is a staunch believer in Bitcoin. He was also one of the first people to introduce Bitcoin to the Chinese business community.

In 2013, the price of Bitcoin surged from $13 at the beginning of the year to $1,100 by the end, sweeping across the world in the first wave of a bull market. Demand in the Chinese market exploded, and BTCC's grassroots model could no longer support the influx of users. Li Qiyuan recognized BTCC's first-mover advantage and decisively took the lead in its operation, transforming this small geek website into an industry benchmark with three bold moves.

He first ended the small-scale workshop model in his home, registered a formal company, and built a complete team encompassing technology, operations, and customer service. He also partnered with domestic and international financial media to bring Bitcoin and BTCC to the public eye, striving to educate ordinary people about Bitcoin and Bitcoin trading. Simultaneously, he optimized the deposit and withdrawal processes, improved system stability, and initially established security mechanisms, successfully handling this surge in users.

In 2013, BTCC reached its peak, with daily trading volume exceeding 100 million yuan and a surge in users, becoming one of the most influential exchanges in China and even globally. The original "iron triangle" of Yang Linke, Huang Xiaoyu, and Li Qiyuan firmly established themselves as pioneers in the Chinese exchange industry.

That period was an absolute wilderness for Chinese cryptocurrency exchanges. There were no regulatory policies, no industry standards, no risk control requirements, no formal payment channels, and no fund custody. User assets were all in the founders' private accounts.

This period of unregulated development facilitated the industry's most crucial initial accumulation:

BTCC proved that the early business model of RMB + Bitcoin matching was viable, expanding users from the geek community to ordinary investors, and providing the most intuitive entrepreneurial model for later entrants.

Of course, the wild revelry eventually brought the first warning bell.

In December 2013, the People's Bank of China and four other ministries jointly issued the "Notice on Preventing Bitcoin Risks," which for the first time clearly defined Bitcoin as not being a currency but merely a virtual commodity. It also set red lines, prohibiting financial institutions and payment institutions from participating in related businesses, and directly pointed out the fatal risks of exchanges: unregistered, poor security, vulnerable to attacks, and the possibility of operators absconding with funds.

Although this notice did not shut down the exchanges, it put the first rein on the industry's unchecked growth.

Looking at the notice, Yang Linke knew that the days of relying on grassroots workshops and the gray areas were coming to an end. Little did he know, a battle among industry giants to disrupt the industry was already imminent.

In the winter of 2013, BTCC moved out of a residential house and into a formal office building. The moment the logo lit up, the three pioneers stood in front of the window, their eyes full of light.

They went from internet cafe managers and tech geeks to overseas elites, becoming the first generation of founders of Chinese stock exchanges, taking the first step from 0 to 1 in the simplest way. But they didn't expect that two more radical entrepreneurs would soon break the pattern they had established and propel Chinese stock exchanges to the top of the global stage.

Li Lin and Xu Mingxing were already rubbing their hands together, eager to fight, not far away.

02 The Rise of the Three Giants and China's Domination of the World

Also in 2013 in Beijing's Zhongguancun, the lights in startup cafes stayed on until late at night.

Li Lin stared at the Bitcoin candlestick chart on his computer, pondering it over and over. Having just emerged from the group-buying debacle, he sensed an unprecedented opportunity.

Meanwhile, in an apartment a few blocks away, Xu Mingxing's fingers were constantly typing code. This tech geek, proficient in high-concurrency trading systems, was building his own trading engine.

Two young men with completely different backgrounds, ideas, and strategies set their sights on the Bitcoin trading market in the same year. Instead of copying BTCC's grassroots pioneering path, they used mature internet methods to break the initial pattern established by Yang Linke and Li Qiyuan, propelling Chinese cryptocurrency exchanges from a niche circle of geeks to a global leader.

Li Lin, born in 1986 in Shaoyang, Hunan, is a veteran of the internet product industry. A computer whiz in his student days, he worked at major companies like Renren and Oracle after graduation, mastering product design and user operations. In 2010, he capitalized on the group-buying boom, founding Mengmai.com, which at one point became one of the top ten in China, but ultimately succumbed to the fierce competition of the group-buying wars.

This failure was a revelation for him: small entrepreneurs can only break through by focusing on vertical markets, addressing essential pain points, and operating with minimal assets.

In 2013, Bitcoin skyrocketed from $13 to $1,000, triggering a massive surge in domestic trading demand. Li Lin immediately tried BTCC, only to be utterly exasperated by the terrible experience: laggy pages, cumbersome deposit processes, and unavailable customer service—user needs were being severely ignored. He instantly grasped the industry's Achilles' heel: China didn't lack cryptocurrency traders; what it lacked was a user-friendly, fast, and stable trading platform.

At that time, BTCC established itself by virtue of its first-mover advantage, but it still had the rough and ready characteristics of a geek website. In September 2013, Li Lin announced the launch of Huobi.com, which, with its "easy to use, free, and fast" features, achieved a trading volume of over one million RMB within three months of its launch, and began to challenge BTC China's first-mover advantage.

Li Lin's breakthrough strategy was user experience: instant deposits and withdrawals, 24-hour customer service, smooth interface, and the killer feature of permanently free transactions, directly piercing through the first-generation platforms that made money from transaction fees.

While Li Lin was aggressively grabbing market share by focusing on user experience, Xu Mingxing, who also wanted to make money in this field, took a completely opposite path.

Xu Mingxing, born in 1985, is a tech geek from Suzhou, Jiangsu Province. A graduate of Beijing University of Posts and Telecommunications, he mastered distributed systems and high-concurrency architecture during his university years. After graduation, he joined Yahoo! China, where he participated in the development of a world-class trading system. Later, he served as the technical director of Douban.com, where he gained a thorough understanding of the stability of a platform with tens of millions of users.

After getting involved with Bitcoin, he completely disregarded the experience of retail investors and immediately set his sights on the core barriers of the trading system. At that time, the matching engines of all domestic platforms could not support massive trading volumes and high-frequency quantitative trading, leaving institutional users with nowhere to go. Xu Mingxing's goal, however, was to create China's most stable, fastest exchange, dedicated solely to serving institutional users.

In October 2013, OKCoin was officially launched, emphasizing "top-notch technology and professional trading" to compete with Huobi.

He personally led the team to write the matching code, creating a system with millisecond-level execution and tens of thousands of concurrent users, directly crushing BTCC's outdated architecture. Similarly focusing on quantitative and high-frequency trading, they firmly grasped professional investors and institutional teams, a stark contrast to Li Lin's retail investor approach.

One understands users and targets individual investors; the other understands technology and safeguards the organization.

Li Lin and Xu Mingxing, in the same year and on the same track, embarked on two complementary yet competitive paths to rise to prominence.

By the end of 2013, Huobi and OKCoin had both risen to prominence, completely breaking BTCC's monopoly and officially establishing a three-way balance of power among Chinese exchanges.

At that time, BTCC, relying on its pioneering reputation, secured its long-term users through overseas resources and established brand recognition; Huobi, with its exceptional user experience and aggressive operations, became the platform with the largest user base; and OKCoin, with its cutting-edge technology, monopolized the institutional and quantitative markets.

Instead of engaging in cutthroat competition, the three companies worked together to expand the industry. With the opening of RMB deposit channels and the standardization of trading processes, it became easier for more people to enter the cryptocurrency market, and exchanges transformed from a fringe business into the most profitable entrepreneurial sector at the time.

China's stock exchanges began to show global influence, but a sudden global black swan event allowed them to take over the world.

In February 2014, a bombshell dropped on the global cryptocurrency industry. Mt.Gox, the Japanese exchange that once dominated more than 70% of global Bitcoin trading volume, was hacked and lost 850,000 Bitcoins, leading to its immediate bankruptcy.

The global cryptocurrency trading system collapsed instantly, with users fleeing in panic, liquidity drying up, prices plummeting, and European and American exchanges collapsing across the board, creating a huge vacuum in the market.

China's three major platforms seized the opportunity to rewrite history: the RMB trading system is mature, the user base is large, and the liquidity is sufficient. Huobi and OKCoin's systems are capable of handling global spillover traffic, while BTCC relies on overseas resources to connect with international users.

In just three months, the core of global Bitcoin trading has shifted from Tokyo to Beijing and Shanghai.

From 2014 to 2016, the three major platforms, BTCC, Huobi, and OKCoin, firmly accounted for more than 80% of the global Bitcoin trading volume, with peaks exceeding 90%. The RMB became the core pricing currency for Bitcoin, and China's trading hours, policy trends, and user sentiment directly influenced global Bitcoin prices.

In the early hours of the morning, Huobi's customer service was still processing orders, BTCC's matching system was operating at high speed late at night in Shanghai, and quantitative trading teams in Shenzhen were monitoring OKCoin's high-frequency trading. At that time, China became the absolute center of global cryptocurrency.

These were the three most glorious years for Chinese exchanges. Without intense regulation, vicious infighting, or fatal collapses, the three giants dominated the global market, reaping enormous profits. Li Lin, Xu Mingxing, and Li Qiyuan stood at the pinnacle of the industry, becoming household names in the global crypto world.

While industry giants dominated, small and medium-sized platforms also sprang up like mushrooms after rain, ushering in a prosperous period of fierce competition in the industry. China Bitcoin focused on low transaction fees to capture the lower-tier market, Bitcoin trading websites focused on spot trading, and BtZ pioneered the deployment of niche cryptocurrencies. By 2016, the number of formal exchanges in China exceeded 30, and Bitcoin traders began to take shape from first-tier cities to small towns.

During this period, there was only pure spot trading, and everyone thought that the golden age would continue indefinitely.

Beneath the surface of prosperity, undercurrents were already brewing.

The competition for users among the three giants is becoming increasingly fierce, and simple spot trading can no longer satisfy their expansion ambitions; small and medium-sized platforms are eyeing futures, leverage, and altcoins in search of new profit points; and the regulatory focus has also shifted from the "characterization of virtual goods" to the rapidly expanding financial risks.

In 2016, the price of Bitcoin steadily rose amidst fluctuations. The three major exchanges sat atop the throne of global trading volume, reaping the benefits of being pioneers.

But they didn't expect that the next phase, an industry-wide infighting over futures, altcoins, and high leverage, was about to begin, and the regulatory guillotine hanging over the industry was also quietly falling.

03 The Frenzied Game of Futures, Altcoins, and Leverage

In the depths of winter 2016, the Huobi office area was brightly lit all night, the Bitcoin price charts on the screens fluctuating wildly due to leverage and hot money. In a corner of the 24-hour convenience store downstairs, cryptocurrency traders with bloodshot eyes were either shouting with joy, clutching their phones, having just doubled their money in a single day with a single altcoin and earned back a year's salary, or squatting on the ground, covering their faces and silently weeping, having been wiped out by high leverage just minutes earlier, their savings gone.

This was the most frenzied period for Chinese cryptocurrency exchanges. The golden age of spot trading had come to an end, and the three giants—Huobi, OKCoin, and BTCC—dropped their masks of gentleness and engaged in fierce competition, while new players exploited loopholes in the rules and took risks.

Futures leverage, counterfeit ICOs, and off-exchange margin trading are like three wildfires that have burned the entire industry beyond recognition. The proliferation of worthless cryptocurrencies, the exploitation of margin trading, fraudulent trading volume, and shady manipulation—all the evils and chaos of the financial market have erupted in the past two years.

It was the high-leverage futures that first broke the industry's bottom line.

Even during the spot market frenzy, a group of traders who spent years in overseas contract markets sensed the opportunity to survive in the bear market.

They don't understand the technology of big companies or do sophisticated operations, but they understand the gambling nature of retail investors best: if they only trade spot, they can only buy when prices are rising, and they can only wait to die in a bear market; with leverage and short selling, they can make money whether prices are rising or falling.

In June 2013, 796, the first Bitcoin futures platform in China, was launched. Despite its high-risk nature, it offered leverage up to 10 times, opening up a completely new battlefield.

The "3.21 LTC crash" in 2014, which shocked the industry, propelled 796 to legendary status.

Late on March 21, the price of Litecoin on the Huobi platform plummeted by half without warning, dropping from 180 yuan to 90 yuan. Without warning, without circuit breakers, and without risk control measures, millions of spot traders were instantly wiped out, their account funds vanishing in an instant.

The platform's customer service hotline was overwhelmed with calls, and the office was packed with retail investors protesting their rights. Some were slamming their fists on the table and roaring, while others collapsed in tears. This incident made retail investors fully aware of the weaknesses of spot trading, and also made "796" an overnight sensation.

In just one month, the trading volume of 796 surged tenfold, making it the only winner in the bear market.

Xu Mingxing and Li Lin could no longer sit still. They knew that derivatives were the real money-printing machine.

Huobi swiftly launched BitVC futures, and OKCoin launched its contract section overnight, together with BTCC, igniting a bottomless futures war with 796.

The commission rate was slashed from 0.1% to 0.03%, almost free to attract users; leverage was increased from 5 times to 20 times, and large investors were even given 30 times leverage privately; the platform also quietly "inserted" funds, delayed transactions, and triggered targeted liquidations, silently consuming the margin of retail investors.

In May 2014, the five major platforms jointly announced a suspension of leveraged lending, but within just one month, high-leverage lending was fully resumed. Faced with exorbitant profits, no one was willing to apply the brakes.

796 became the first sacrifice in this fierce competition.

On the evening of November 3, 2014, 796 suddenly crashed across the entire platform, making it impossible to log in, place orders, or withdraw funds, leaving users' funds locked within the platform. The founding team worked through the night to fix the problem but were powerless to reverse it. It reopened three days later, but trading volume had plummeted to zero, trust had collapsed, and the once-leading futures trader disappeared within weeks.

The demise of 796 was the most stark warning: high leverage without risk control is a money-devouring black hole, but by then the market was already swept up in gambling, and no one paid attention to this warning.

While the futures market was fiercely competitive, the altcoin and ICO sectors were creating an even more frenzied wealth bubble, which also bred the worst kinds of chaos.

Bitcoin and Litecoin have long been firmly monopolized by the three giants, leaving small platforms with no chance to break through. Zhang Shousong, a former Alibaba security engineer, quickly found his own path—relaxing the listing review process and focusing on long-tail altcoins. As long as the project team pays a listing fee, Jubi.com approves them all.

The ICO craze arrived in 2017, and Jubi came to the fore.

Hundreds of altcoins were launched in quick succession, with project teams and platforms sharing the profits. Initial price surges of ten or even a hundred times attracted retail investors, who then quietly dumped their holdings, leaving behind a mess. Retail investors never read the white paper, relying solely on so-called insider information; they were willing to invest their entire fortune in even worthless cryptocurrencies.

Using this approach, Jubi.com briefly topped the global charts in daily trading volume in 2017, serving a total of 23 million users. It became a wealth-creating factory in the altcoin sector, but also a veritable breeding ground for fleecing unsuspecting investors.

Almost simultaneously, Yunbi.com took the "opinion leader exploitation" to its extreme.

Li Xiaolai, an early Bitcoin evangelist, holds a 25% stake and has a following of millions of fans. Yunbi.com is not only the first platform in China to list Ethereum, but also the preferred platform for ICO projects.

In 2017, one ICO project after another was launched on Yunbi.com, and the price skyrocketed on the first day of trading. The myth of 100x and 1000x coins spread throughout the internet.

Led by platforms like Jubi and Yunbi, a frenzy ensued, with smaller platforms such as Yuanbao.com and BitTimes following suit, resulting in a proliferation of platform coins, altcoins, and ICO tokens. The entire market turned into a casino, with bad money driving out good, and genuinely technology-driven projects being drowned out.

The frenzy surrounding futures and altcoins has completely distorted the entire industry. From the three giants to small platforms, all the unspoken rules have been exposed, and the chaos is appalling.

At that time, Huobi and OKCoin fully opened up margin trading, allowing users to borrow 5 to 10 times their initial capital to trade cryptocurrencies, which is essentially leveraged trading, equivalent to official margin financing, with astonishingly high interest rates. Off-exchange margin financing companies offered leverage up to 50 times with a daily interest rate of 1%. Borrowing 100,000 yuan would incur 1,000 yuan in interest per day. Countless retail investors borrowed high-interest loans to trade cryptocurrencies, and when the market reversed, they were instantly burdened with debt.

In an effort to claim the title of "world's number one in trading volume," all platforms are frantically inflating their trading volume.

Robotic wash trading allows 100 million in trading volume to be inflated to 10 billion; order books are filled with fake orders to create the illusion of ample liquidity; media reports of trading volume data are so inflated that they are practically worthless. The open secret in the industry is that the actual trading volume of Chinese exchanges is only one percent of what they publicly claim.

At that time, none of the exchanges had third-party fund custody. Users' RMB and cryptocurrencies were all stored in the founders' private bank cards and wallets. Platforms could arbitrarily misappropriate users' funds for cryptocurrency speculation, investment, and extravagance. Small platforms could abscond with the money at any time. From 2016 to 2017, hundreds of small exchanges suddenly shut down, their founders disappeared, and users' assets were all lost.

Without regulation or insurance, the safety of users' assets depends entirely on the founder's conscience.

Similarly, at that time, exchanges did not have real-name authentication, and deposits relied entirely on private transfers. Gambling funds, stolen money, and black money were quickly laundered through exchanges, and underground banks used cryptocurrencies to transfer funds across borders and evade foreign exchange regulations.

Hacking attacks are frequent. Bitfinex's cold wallet was hacked, resulting in the theft of 7,170 bitcoins, with the platform barely covering the loss. Smaller platforms, after being hacked, simply abscond with the money, leaving users to foot the bill. Cases of chaotic private key management and internal employee theft are commonplace.

In the first half of 2017, the frenzy surrounding Chinese exchanges reached its peak: more than 90% of global Bitcoin trading volume came from China, ICO projects raised hundreds of millions of dollars overnight, and everyone was talking about getting rich quick through cryptocurrency trading.

In June 2017, Beijing's summer heat was suffocating. Inside the exchange offices, the atmosphere of revelry continued all night long. Bots that inflated trading volumes were running non-stop, ICO projects had long queues of listing applications, and the sounds of futures leveraged account liquidations were drowned out by the clamor of the bull market.

No one wanted to believe that this four-year-long period of unbridled growth was about to come to an end.

On September 4, 2017, a joint announcement by seven ministries brought all the frenzy to an abrupt end, marking the complete end of the golden age of domestic exchanges.

04 The First Separation of Regulation from Domestic Transactions in September 2004

In early 2017, the Beijing branch and Shanghai branch of the People's Bank of China took the lead in meeting with the heads of three leading platforms: Huobi, OKCoin, and BTCC, and reiterated the core red line of document No. 289 of 2013 issued by the People's Bank of China: Bitcoin is only a virtual commodity and is by no means a legal tender, and financial institutions must not get involved in related businesses.

Five days later, a joint inspection team composed of the central bank and local financial bureaus officially entered the three platforms to conduct on-site work. They retrieved back-end transaction data, verified fund flows one by one, and reviewed every user agreement: unlicensed operation of quasi-financial businesses, illegal financing and lending to amplify leverage, a complete lack of anti-money laundering regulations, and user funds not being held in third-party custody...

On January 18, the People's Bank of China officially announced the results of its inspection and issued a mandatory rectification order: immediately suspend all margin trading and lending businesses, cancel zero-fee transactions and restore transaction fees, establish a real-name authentication and anti-money laundering system, implement third-party custody of user funds within a specified period, and eliminate fraudulent trading activities.

This single blow caused the industry to bleed instantly.

Previously, the daily trading volume of Bitcoin, which was built up by "zero transaction fees + leverage + wash trading", plummeted from an astronomical figure of 13.6 million coins to 120,000 coins in just one month, a drop of more than 99%.

Standing in front of Huobi's big data screen, watching the plummeting curve, Li Lin chain-smoked, his fingertips slightly burning. Xu Mingxing convened a technical conference overnight, ordering the shutdown of all leveraged trading interfaces, and the team worked through the night modifying the system code. Far away in Shanghai, Li Qiyuan immediately adjusted the BTCC business according to policy, scaling back all high-risk modules. For the first time, the entire industry truly felt that the regulatory sword was really about to fall.

However, on the other side of the industry at the same time, ICO projects still had long queues of listing applications, the hype surrounding altcoins remained unabated, and underground financing companies continued to solicit customers under different guises.

Until 3 PM on September 4, 2017, an official announcement went viral across the internet, causing an uproar in the entire cryptocurrency community.

Seven ministries—the People's Bank of China, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission—jointly issued the "Announcement on Preventing Risks of Token Issuance Financing," also known as the "September 4th Announcement," which has sent chills down the spines of the entire industry. Based on the "People's Bank of China Law," the "Securities Law," and other laws and regulations, the announcement used the strongest language to deliver a death sentence on domestic cryptocurrency trading.

Image source: People's Bank of China website

Token issuance financing is essentially an unapproved and illegal public financing activity, suspected of illegal fundraising, financial fraud, and pyramid schemes, and is hereby completely halted. Any trading platform is prohibited from engaging in any related services such as fiat-to-cryptocurrency exchange, token exchange, pricing, and information intermediation. Banks and payment institutions must completely cut off funding channels, and platforms that violate regulations will have their websites shut down, apps removed from app stores, and licenses revoked. Projects that have already raised funds must return the funds within a specified period.

This effectively terminates domestic exchange operations from a legal perspective.

The moment the news broke, the entire industry fell silent, followed by widespread panic.

Industry group messages were flooded with 999+ messages, filled with cries of "It's all over!" and "What about the money?" Bitcoin and altcoins plummeted across the board, with drops exceeding 30% within minutes. Exchange customer service systems were instantly overwhelmed, with phone and online inquiries filled with users requesting withdrawals and refunds, creating a cacophony that nearly lifted the roof off.

Li Lin printed out the entire announcement and read it word by word, his fingertips crumpling the paper. After half an hour of silence, he only said one sentence to his team: "Execute, execute everything strictly."

Xu Mingxing repeatedly checked the scope of the ban on "fiat currency exchange" and "information intermediaries" in the announcement. His expression was solemn. He immediately ordered the closure of all fiat currency transaction channels and the initiation of user asset liquidation.

Li Qiyuan convened a global meeting overnight, making it clear that BTCC must first shut down its domestic operations and use the reputation of a long-established platform to safeguard the last line of defense for users.

The week following the September 4th announcement was the darkest moment for all exchanges.

An unprecedented run on the bank occurred, which was more terrifying than any hacking attack or market crash.

Online, thousands of withdrawal requests were being processed every second, bringing the server to the brink of collapse several times. Technicians worked for three days and nights without sleep to keep the channel open.

Offline, a large number of users gathered downstairs at the platform's office building, holding up their phones and emotionally demanding immediate withdrawals, creating a tense atmosphere.

The customer service girls were surrounded by users' accusations and complaints. They apologized with red eyes while manually reviewing every withdrawal. By the end of the day, their voices were completely hoarse.

Finance staff are constantly checking transfers against the rapidly fluctuating bank statements. Large transactions in private accounts frequently trigger bank risk controls, making every step difficult.

From late September to early October, BTCC, Huobi, and OKCoin successively issued final announcements, every word of which closely followed the policy requirements of the September 4th Announcement: effective immediately, all RMB and cryptocurrency trading businesses within China will be suspended, and user assets will be cleared in an orderly manner.

At that moment, the core lifeline of domestic exchanges was completely severed.

From the first line of code in a Shanghai residential house in 2011 to becoming the dominant player accounting for 90% of global trading volume in 2017, the golden age of Chinese cryptocurrency exchanges in China has come to an abrupt end.

The elimination of domestic business is not the end of the industry, but a forced mass migration.

All platforms understand that staying within the country is a dead end, while going abroad might offer a glimmer of hope.

05 Offshore Emergence, Madness, Disillusionment, and Ultimate Zeroing Out

Three months after the September 4th Announcement was implemented in 2017, cryptocurrency trading in mainland China was abruptly halted. However, it seems that none of these entrepreneurs who emerged from the wilderness of the internet have truly left the scene.

The September 4th crackdown only shut down domestic RMB trading; it didn't stop Chinese people's addiction to cryptocurrency speculation. The first to react were Li Lin and Xu Mingxing, their two old rivals.

Li Lin completely shut down Huobi's domestic business and then immediately set up Huobi.Pro in Singapore. He's always prioritized stability in business; whether it was group buying or exchanges, he proceeded cautiously step by step, and this time was no different—avoiding illegal fiat currency channels, only listing the USDT stablecoin, and neither actively blocking nor openly recruiting mainland users to access the platform. Like a shopkeeper tending his stall, he simply wanted to steadily maintain the overseas presence. Watching his team members change into overseas employee badges one by one, he knew in his heart that Huobi would never return to its golden age in Beijing's Wangjing SOHO.

Unlike Li Lin's conservative approach, Xu Mingxing had no intention of simply maintaining the status quo. As soon as the September 4th document was issued, he renamed OKCoin to OKEx and plunged headlong into the futures contract business. Back in China, he competed with Li Lin using technology and high-frequency trading; now, freed from domestic regulatory constraints, he maximized leverage and established his operations center in the less regulated Malta. In his eyes, spot trading was no longer profitable; only futures contracts and leveraged derivatives could allow OKEx to surpass Huobi. The two had been battling it out for five years, and overseas, it remained a balance of offense and defense, neither willing to concede.

Just as Li Lin was steadily building his spot trading base, Xu Mingxing was betting everything on the futures market, and the two were locked in a fierce battle for the second-place position in the industry, a veteran technologist who had withdrawn from OKCoin's core circle was quietly making moves and creating a global game that neither of the two giants could touch.

This person's name is Zhao Changpeng.

In terms of background, Zhao Changpeng is a typical overseas technologist, with a much more solid foundation than most grassroots entrepreneurs in the industry.

Zhao Changpeng was born in Jiangsu in the 1970s. He immigrated to Canada with his family when he was young and received a hard-core Western engineering education. After graduation, he worked for many years on the underlying architecture of the world's top financial trading system. He worked in the core data center of the Tokyo Stock Exchange and the Bloomberg cross-border trading system team. He has been working on high-concurrency and zero-lag matching underlying technology for many years. He has a solid understanding of the core trading logic of traditional finance. He is not a self-taught professional who switched careers halfway through his career.

In 2014, as the crypto industry began to emerge, he saw the potential and returned to China to enter the field. Through He Yi's connections, he officially joined OKCoin, a leading platform in its early days, as CTO, holding the reins of the platform's core technology.

At that time, Xu Mingxing was in charge of overall strategy and capital control, Zhao Changpeng was responsible for the full-stack trading system and asset security, and He Yi coordinated public relations and external communication across the entire market. The three were closely bound together, forming the "OK Iron Triangle," which was the most valuable and efficient team in the early days of the cryptocurrency circle. They managed to elevate OKCoin to a duopoly position that rivaled Huobi.

After working together for several years, the ideological rift gradually fermented, and the internal power struggle and differences in direction continued to intensify. The iron triangle completely drifted apart, and Zhao Changpeng was unable to calm down. He decided to withdraw and secretly harbored a fierce determination to turn the tide and crush his former employer.

In 2017, the cryptocurrency market was in turmoil, industry chaos was emerging, and signals of tightening regulations were released ahead of schedule. While most people in the industry were blindly increasing their domestic fiat currency trading and frantically reaping short-term traffic, Zhao Changpeng accurately sensed the policy threat and decisively went all in, betting his entire fortune.

He directly sold off his prime real estate in Shanghai, gathered all his cash flow, and without hesitation, started his own business, Binance.

Early photos of CZ founding Binance

From the very beginning, he deliberately avoided the compliance red lines that everyone flocked to, did not touch any domestic RMB legal tender docking channels, and only carried out pure currency exchange business. From the underlying architecture and business links to the main location, he perfectly avoided the regulatory bans of the subsequent September 4th announcement, and stood in the safe zone in advance.

When the September 4th policy was implemented, Huobi and OKEx hurriedly shut down their domestic channels, hastily cleared out their existing users in mainland China, and were busy cutting off their businesses to stabilize the market and deal with regulatory investigations. Meanwhile, Binance had already prepared its overseas links and opened up all its access points, quietly taking over all the retail investors, funds, and traffic that had escaped from the two giants.

Without past burdens, business constraints, or compliance issues, Binance seized the opportunity presented by the times in just six months, directly crushing Huobi and OKEx, which had been deeply involved in the industry for many years, and forcefully rising to the top of the global trading volume list. From a former technical executive, Binance has become the new hegemon of the entire industry.

Xu Mingxing felt a pang of resentment watching his former subordinates crush him; Li Lin, witnessing Binance's rapid growth, could only continue to defend his core business. These three old acquaintances, on the overseas battlefield, had returned to their old three-way rivalry.

While tech giants were vying for territory overseas, two people focused solely on developing technology managed to survive in the gaps between these giants.

Gan Chun, a security expert from Ant Financial, knew he couldn't compete with Li Lin, Xu Mingxing, or Zhao Changpeng, so he simply avoided mainstream cryptocurrencies and focused on niche altcoins that no one else cared about. He registered the platform in Seychelles, calling it KuCoin. He didn't advertise or try to grab headlines; he relied solely on security and stability to quietly amass tens of millions of users.

Han Lin is even more low-key. He has a PhD in optoelectronics from Canada. He was scammed when he bought Bitcoin, and in a fit of anger, he started Bitfinex.

After the September 4th crackdown, it was renamed Gate.io. He is a rare honest person in the industry. In the early years, when the platform was hacked, more than 7,000 bitcoins were stolen. He personally paid out all of them to the users. It is on this reputation that he has been able to survive steadily in the cracks between the giants.

These four individuals, one conservative, one radical, one speculative, and one pragmatic, built a thriving overseas exchange business. But no one could have predicted that a techie from Huobi would use an absurd model to completely upend the industry.

This person's name is Zhang Jian.

Zhang Jian, the former CTO of Huobi, also wrote the first bestselling book on blockchain in China and is widely recognized as a technological idealist in the industry. After leaving Huobi, he always wanted to pursue genuine technological innovation and disapproved of the exchange's practice of profiting from transaction fees and exploiting investors. When the bear market hit in 2018, Zhang Jian came up with a ruthless solution—transaction mining.

Simply put, all transaction fees paid by users are returned as platform tokens, and those holding platform tokens can also receive dividends.

It was all hype. It sounded like a benefit, but it was essentially a Ponzi scheme, robbing Peter to pay Paul. But the industry had already gone crazy for it. Within 12 days of its launch, FCoin's trading volume exceeded the combined volume of Huobi, OKEx, and Binance.

Zhang Jian went from being an industry role model to a "disruptor" overnight, but he knows best that this bubble will burst sooner or later.

Sure enough, less than two years later, FCoin collapsed. More than 7,000 bitcoins couldn't be redeemed, Zhang Jian disappeared overnight, leaving hundreds of thousands of users with nothing. The once-idealist technologist became the biggest fraudster in the industry, and this farce became the most glaring scar on the gray market over the past four years.

FCoin crashed, but the industry's frenzy didn't diminish at all.

Within mainland China, the related business has not completely disappeared, but has gradually moved into a more hidden and dispersed gray area.

Mining once formed a significant cluster in Sichuan, Yunnan, Inner Mongolia, and other regions, with a large number of mining machines relying on cheap electricity to operate continuously. China's computing power once accounted for a significant share of the global market. However, behind this rapid expansion, problems such as energy consumption, local regulatory arbitrage, and electricity compliance began to accumulate.

Meanwhile, over-the-counter trading of USDT is quietly spreading among the public. WeChat, Alipay, and bank card transfers have become alternative channels for many users to enter and exit the cryptocurrency market. While this has maintained market liquidity to some extent, it has also inevitably been exploited by some illicit funds, becoming a difficult link to regulate in activities such as fraud, gambling, and capital flight.

2019 was a golden age for the development of the exchange sector in the country.

After several rounds of bull and bear market development, the industry's discourse power is firmly in the hands of three companies, collectively known in the industry as the HBO Iron Triangle. Huobi, Binance, and OKEx share more than 80% of the effective traffic in the Chinese-speaking world, crushing both the spot and futures markets. Second-tier platforms are powerless to compete head-on, and third-tier smaller exchanges can only stand aside and play along.

Binance pioneered the IEO (Initial Exchange Offering) model with Launchpad, and the initial offering of BTT tokens saw a doubling in price, igniting a nationwide frenzy for new token offerings. Subsequent high-quality projects followed suit, allowing Binance to steadily reap the initial traffic benefits. In July, Binance launched the perpetual contract trading platform, leveraging both spot and derivatives markets. Throughout the year, Binance consistently held more than 30% of the global trading volume, achieving a dark horse comeback and ascending to the top of the global market.

Huobi launched Huobi Prime and simultaneously launched IEOs, demonstrating a strong ability to maintain its position but lacking in innovation, thus firmly holding onto its second-place position in the industry.

OKEx launched OK Jumpstart to differentiate itself from IEOs, standing shoulder to shoulder with Huobi to maintain its position in the second tier. The three exchanges routinely copy each other's strategies, resulting in fierce competition. Their new product launch schedules, event formats, and product models are highly similar, leading to Chinese retail investors migrating back and forth between the platforms.

IEOs were the absolute traffic driver of 2019, becoming a versatile tool for platforms to increase revenue, boost market prices, and attract new users. Project teams bypassed the cumbersome process of private fundraising and directly connected with top exchanges for compliant listing. Users could participate in the lottery for new token offerings simply by staking the platform's tokens. The platform could steadily earn listing service fees and secondary market transaction fees, creating a short-term win-win situation for all three parties.

Amidst the frenzy, retail investors' FOMO (Fear of Missing Out) reached its peak, causing platform tokens to collectively double in value and the entire industry's valuation to soar. However, hidden dangers lurk beneath the surface of this euphoria. A large number of unqualified projects seized the opportunity to raise funds, leading to subsequent market crashes, frequent collective protests, and chaotic speculation. This unregulated and inefficient behavior laid the groundwork for future global regulatory crackdowns.

The leading companies are all vying for core profits, while second- and third-tier platforms are avoiding direct competition and instead focusing on differentiated strategies to penetrate lower-tier markets, quietly making a fortune.

KuCoin, Gate.io, BitMax, ZB, LBank, Bibox, CoinEx, Bitforex, EXX, CoinBene, MXC, BiKi, Hotbit, BigONE, DigiFinex, BitZ, IDAX, and other platforms also received dividends, each fulfilling their respective roles to share the remaining scattered traffic.

In retrospect, 2019 was the last wild frenzy for cryptocurrency exchanges.

With clear hierarchies, diverse gameplay, abundant traffic, and frequent stories of overnight riches, HBO's three giants monopolize the core benefits across the entire domain, second-tier platforms develop quietly and differentiatedly, and third-tier small firms follow the trend to survive by piggybacking on traffic. The entire industry collectively gets rich by relying on mainland gray traffic, bear market rebound opportunities, and IEO speculative gameplay.

It was during this period that the image of the crypto industry in China began to rapidly diverge: on one hand, there were enormous business opportunities brought about by mining, trading, and global liquidity; on the other hand, there were social risks brought about by regulatory blind spots, gray funds, and the spread of scams. The industry was not negated overnight, but rather, through long-term disorder, it gradually accumulated reasons for strong regulatory rectification.

Everyone knows that these bleak good days will eventually come to an end.

First, regulators blocked Alipay and WeChat's over-the-counter trading channels, then they cleared out mining farms in Inner Mongolia and Sichuan, and finally they cut off all the circumvention channels for exchanges.

Until September 24, 2021, a notice from ten departments was issued, which definitively stated that all cryptocurrency-related businesses within China were illegal financial activities; and that overseas platforms providing services to mainland Chinese were also illegal.

Image source: https://www.safe.gov.cn/safe/2021/0924/19915.html

This time, no one dared to take any chances.

Li Lin's Huobi completely shut down its mainland users; Xu Mingxing shut down OKEx's mainland IP addresses and completely shifted its focus to Europe; Zhao Changpeng cut off Binance's VPN access point, abandoning its largest hidden traffic pool; Gan Chun and Han Lin also obediently restricted mainland users, bidding farewell to their shady businesses. The remaining mid-tier and long-tail exchanges that relied on the Chinese market for survival have basically all disappeared into the annals of history in this round of crackdown.

The Chinese mainland market, which once accounted for 90% of global trading volume, has been completely wiped out.

06 The Breakup of Giants, Sell-Offs, and the New Global Compliance Landscape

On September 24, 2021, an official document was issued, classifying all cryptocurrency-related businesses as non-compliant financial activities. It prohibited overseas platforms from directing users to open accounts in mainland China, and banned domestic merchants and individuals from providing payment, community, and technical support to exchanges. Even mining power was completely phased out. In short, the native domestic cryptocurrency ecosystem was brought to a standstill.

Overnight, the paths of the three giants began to diverge in three different directions.

Before the policy tightening, Huobi relied on its early entry into the industry and its established reputation to firmly hold its position as a major player in the spot market. Mainland retail investors made a steady stream of transactions, and transaction fees were collected steadily. Huobi did not need to take risks with high-risk contracts or list niche cryptocurrencies to cover its revenue.

However, after the new regulations were implemented, its advantages were immediately wiped out, and a series of troubles followed:

Licenses in Europe and America are impossible to obtain, Southeast Asian regulators are constantly summoning them for talks, and cross-border users are frequently subject to traffic and IP restrictions. Renting overseas venues, hiring local teams, and engaging in compliance and legal counsel are costing them money like water, yet the platform's daily active users and trading volume continue to decline. Huobi's once solid operating foundation is suddenly riddled with holes. Moving forward carries compliance risks, while retreating means sacrificing years of established business.

Li Lin saw things very clearly and understood everything perfectly. In the early years, regulations were lax, and one could do business steadily by relying on connections and subtle referrals.

After 2021, everything became a hard requirement: user fund custody, on-site office registration, fund traceability and risk control, and compliance endorsement from senior executives. Without any one of these, one's position would be invalid.

He had sufficient local connections, but lacked overseas compliance expertise and cross-border government and business resources. On one hand, there was increasingly stringent regulatory pressure; on the other hand, there were ever-increasing operating costs and unpredictable risks associated with fulfilling his duties. After much deliberation, the best solution seemed to be only one: while the platform still had a valuation, he should gracefully sell and exit, rather than risk the industry's future turmoil.

2022 coincided with a bear market, resulting in a decline in assets across the industry and a drop in exchange valuations, creating a window of opportunity for stable turnover at low levels. Li Lin quietly connected with Hong Kong capital, following formal institutional M&A procedures, with the publicly disclosed acquirer being Hong Kong-based About Capital Management; subsequently, Sun Yuchen joined the global advisory board and became one of the most key publicly known figures in branding, operations, and ecosystem development.

In October of that year, all the settlement procedures were completed. Li Lin cleared out all his shares, resigned from all positions, and cleanly severed ties with Huobi. On the surface, it appeared to be the first founder retiring after achieving his goals, but in reality, it was a precise timing to cash out during the bear market and secure his profits. From that moment on, the ironclad industry structure firmly held by the old three giants cracked, and the curtain officially rose on a comprehensive compliance reshuffle of the entire industry.

Li Lin turned and left, no longer concerning himself with any trivial matters of the platform, thus laying the groundwork for the later establishment of Xin Huo, a compliant institutional custody business.

Justin Sun took over the overall operation, but instead of sticking to the old ways, he gradually adjusted the platform's original operating rhythm in line with the current overseas compliance environment, adapting it to the actual needs of the offshore community, and quietly rewriting the originally stable competitive ecosystem of Chinese-language exchanges.

After taking over, Sun Yuchen's first task was to adjust the brand's external name, downplaying its local connections to facilitate registration and implementation in various overseas locations.

First, it was temporarily renamed "Huobi" to reduce the old platform's recognition in mainland China and to adapt to the basic compliance standards of multiple countries; then, in September 2023, at the TOKEN2049 conference in Singapore, when global industry professionals gathered and traffic was at its peak, it took the opportunity to officially announce the renaming of the entire platform to HTX.

Photos from the TOKEN2049 / HTX DAO x TRON Afterparty

While leveraging Huobi's user base accumulated over many years, it also collaborates with its own Tron ecosystem, smoothly transitioning at the platform's ten-year operational milestone, quietly completing its brand upgrade, and simultaneously supplementing its external compliance disclosures, firmly adapting to the basic requirements of overseas full-domain operations.

After streamlining its branding, the platform adjusted its business strategy to better suit the actual trading preferences of retail investors. It expanded its offerings of highly liquid trading instruments, appropriately broadened the range of derivatives trading levels, and launched a batch of compliant, niche cryptocurrencies to quickly increase trading volume and stabilize its industry ranking. Simultaneously, it refined the operation of various communities, providing tiered support to existing users with different needs, and invited experienced overseas industry professionals to form an external advisory team, ensuring a strong and compliant external image.

Short-term trading data shows a visible recovery, but the platform's underlying security risk control and full-chain fund custody system have not been upgraded in time. There is still room for optimization in the allocation of existing funds and the management of real liquidity on the market. Behind the bustling traffic lies the hidden pressure of long-term operation.

In fact, some minor issues left over from the equity transfer back then have gradually come to the forefront.

In 2025, Li Lin and Sun Yuchen had several rounds of public communication and coordination regarding the final details of the transaction, such as fund reconciliation, position coordination, and transfer of ecosystem tokens.

Both parties explained their respective rights and responsibilities, rationally sorted out the practical details such as the existing funding gap, the progress of margin replenishment, and the compliant circulation of tokens, and properly handled all the remaining matters of the settlement in accordance with regulations.

Meanwhile, the market experienced significant fluctuations from 2023 to 2025, with some users reporting issues such as system lag, abnormal price movements, and inconsistent order matching speeds under extreme market conditions. The platform has been continuously optimizing its backend operations and maintenance capabilities. Industry technical staff turnover is normal, and backend service efficiency is being steadily iterated and adjusted. By 2026, HTX will focus on cultivating its existing user base in the Chinese-speaking world, firmly maintaining its own niche market segments, and ensuring stable operations without disruptions.

While HTX steadily adjusts its business pace and refines its reputation within its target audience, Xu Mingxing, who relies on contract technology to build his empire, has long had a clear understanding of the industry's trends.

He anticipated that global regulations would only become stricter year by year, so he simply gradually reduced the frequency of his public appearances, handed over the responsibilities of daily operations, and quietly retreated behind the scenes, focusing only on core strategies and overall risk control, no longer joining the fray in the spotlight.

After the complete shutdown in 2021, OKEx has maintained its basic transaction volume without experiencing operational turmoil or cash flow problems, thanks to its well-developed underlying contract trading system and long-term partnerships with leading quantitative trading institutions.

However, the overall environment remains stringent. Cross-border leverage controls are becoming increasingly stringent, and transaction compliance checks are becoming more frequent. Inquiries from overseas regulators are received every few days, and various user experience requests must be addressed in a closed-loop manner, while cooperating with local special inspections. Revenue may appear stable on paper, but the pressure of compliance hangs over our heads at all times, for fear of crossing the line and incurring troubles such as business restrictions and cross-border penalties.

Xu Mingxing knew in his heart that the good days of making easy money through contracts were over. From now on, the industry would not be about aggressive tactics, but about compliance licenses, solid risk control, and institutional connections. Continuing to stand at the forefront and lead the charge would only increase the personal risks involved.

To isolate risks and simplify governance, he voluntarily withdrew from the public eye, handed over the daily operations to a professional team, and split up multiple offshore operating entities to divide and implement all the tedious and responsible tasks such as compliance coordination, user maintenance, and fund reconciliation.

On January 18, 2022, OKEx officially changed its name to OKX. On the one hand, it is laying out the Web3 ecosystem and expanding its on-chain custody business, breaking out of the single exchange framework. On the other hand, it is downplaying the early contract label, standardizing historical compliance ledgers, and reducing the risks of cross-border traceability and accountability.

The original fierce general who once fought alongside Li Lin has now quietly disappeared, and OKX has completely transformed into a professional and compliant platform, becoming the second pillar of the old three giants, and has been successfully established.

After stepping down and relinquishing control, OKX adopted a pragmatic approach, concentrating all its human and financial resources on two key tasks: acquiring compliant licenses in various countries around the world and focusing on serving large institutional clients.

Starting in 2023, OKX accelerated its global compliance transformation, establishing local teams and acquiring compliance qualifications in markets such as the Middle East and Southeast Asia, gradually transforming from an early offshore trading platform into a global platform with licenses operating in multiple regions.

In 2025, OKX made key progress in European compliance, obtaining a Malta MiCA license in January and beginning to expand its services to the European Economic Area through the passporting mechanism. In February of the same year, OKX reached a settlement with the U.S. Department of Justice on historical compliance issues, paying more than $504 million in fines and forfeitures, making up for historical shortcomings in anti-money laundering, KYC, and cross-border business operations.

Since then, OKX has continued to strengthen its reserve verification, fund transparency and anti-money laundering risk control system. The platform image has also gradually shifted from a "contract technology-driven exchange" to a mainstream trading platform that emphasizes compliance, custody, institutional services and global licenses.

By 2026, OKX had received a minority stake investment from ICE, the parent company of the New York Stock Exchange, valuing the company at approximately $25 billion. This not only signifies a deeper involvement of traditional financial infrastructure in the crypto trading system but also further reinforces OKX's move towards the mainstream financial market.

After three years of quiet and dedicated development, it has steadily absorbed the stable funds flowing out of Binance and the prudent users diverted from HTX, quietly and firmly establishing itself as the world's second largest player, becoming a true hidden winner in the industry.

While some are cashing out and leaving, others are holding the fort behind the scenes, and the industry landscape is quietly shifting.

Only Zhao Changpeng, who once relied on a frenzied expansion to reach the top of the industry, now faces a multi-layered regulatory encirclement from multiple countries around the world. His once dominant scale has completely returned to normal.

During Binance's most glorious years, it relied on its lack of a fixed headquarters and offshore, distributed, lightweight operation to attract global retail investors across all regions, and its trading volume consistently led the entire industry.

In its early days of aggressive expansion and market share acquisition, Binance prioritized building a massive online presence and a global customer base, gradually establishing compliance systems and localized risk controls to flexibly align with the industry's early, extensive growth trajectory. However, regulatory agencies have begun to target Binance.

The FTX liquidity crisis in November 2022 may have been one of the triggers.

Even before the controversy escalated, CZ recognized the risks and compliantly reduced his FTX stake, subsequently disclosing his portfolio adjustment plan in accordance with regulations. This coincided with FTX's inherently weak liquidity, triggering a surge in withdrawals and temporarily impacting FTX's financial base. Following Binance's announcement of acquisition intentions, CZ quickly conducted due diligence and rationally terminated the cooperation.

SBF was also found guilty of stealing billions of dollars from customers due to FTX's inability to repay user funds, constituting a felony of fraud, and faces a long prison sentence.

The collapse of FTX has also led global regulators to focus more on compliance checks of leading platforms.

The aftershocks of FTX's collapse were still reeling when, in March 2023, several overseas crypto-partnering banks experienced liquidity adjustments: Silvergate's orderly liquidation was nearing completion, Signature Bank was placed under the unified management of local financial authorities, and Silicon Valley Bank saw minor involvement in crypto-related fund flows. Traditional banks tightened their crypto partnership limits, industry-wide liquidity returned to rationality, and regulatory oversight and routine inspections were significantly strengthened.

With multiple historical compliance issues piling up and industry fluctuations, in November 2023, Binance and Changpeng Zhao reached a compliance agreement with the U.S. Department of Justice: the platform paid $4.3 billion in compliance rectification funds to close the loop and improve historical issues such as anti-money laundering, cross-border compliance, and local business operations.

CZ was also sentenced to four months in prison and ordered to forfeit $50 million for violating U.S. anti-money laundering regulations. After his release, CZ, who stepped down as CEO, focused on overall compliance strategy coordination, and his personal industry decision-making power returned to a stable normal.

Zhao Changpeng's real-life scene outside a US courtroom in 2024

After the rectification, CZ completely curbed its expansionist ambitions, no longer blindly acquiring new assets, and focused on maintaining stability and deepening compliance. It systematically tightened its high-risk derivatives business, optimized the management of cross-border fund flows, separated multiple regional independent compliance entities, and divested asset segments with high public opinion risk and high compliance concerns.

In 2025, with Trump taking office, the industry landscape changed dramatically. The Trump family established a presence in the WLFI crypto ecosystem and issued the USD1 compliant stablecoin, pegged to US Treasury reserves. In May of the same year, MGX, an Abu Dhabi-based investment firm, used WLFI's USD1 stablecoin to complete a $2 billion investment in Binance, significantly deepening the ties between Binance and Middle Eastern capital and the stablecoin ecosystem.

Furthermore, in October 2025, compliance issues related to CZ's past compliance performance were waived, which also indicates that the industry has officially entered a new stage of government-business collaboration.

The three giants have each made adjustments and steadily diverged, with the vacated compliant users and market share flowing to second-tier platforms that have always maintained a low profile, followed the rules, and avoided the hype. A new stable pattern has thus taken shape, and the window of opportunity for grassroots crossovers to enter the market and overtake others overnight has been completely closed.

Under Gan Chun's leadership, KuCoin has avoided close competition with industry giants for many years, focusing instead on cultivating niche overseas cryptocurrencies with high demand. It has weathered several bull and bear market cycles steadily, even when leading platforms adjusted their strategies or users sought refuge and diverted to other markets.

Gate.io, led by Han Lin, built its reputation on security by fully compensating stolen Bitcoins in its early years. It prioritizes stability and has weathered multiple rounds of bear market storms and fluctuations of small and medium-sized platforms, firmly holding onto a group of stable, high-net-worth users.

The era of chaotic, unregulated competition has ended, and the era of brutal battles has come to a close. The crypto industry has officially entered a stable phase characterized by strong regulation, professionalization, and globalization. All the ups and downs of early coin entrepreneurs have now come to a close.