The Paradox of China’s Crypto Regulation and Capital Going Global (Part 2)

The Global Expansion of Chinese Crypto Capital and the Systemic Collapse of Community Culture

In Part 1, I examined how China and the United States have gradually diverged onto two fundamentally different regulatory and institutional paths in the Web3 era. While the American model remains anchored in token-based financialization and dollar-linked stablecoins, China has deliberately removed the coin from the centre of its Web3 strategy, repositioning blockchain as an infrastructure for governable data, industrial coordination, and sovereign digital currency. Next, we’ll turn to the global political and cultural implications of Chinese crypto capital.

Against this backdrop of domestic regulatory restructuring, a striking paradox emerges: even as China tightens control over crypto activity at home, capital and actors with Chinese backgrounds continue to expand aggressively in overseas markets. The clearest examples are the reported cooperation between Binance and the Trump family, as well as Justin Sun’s appearance at a White House dinner as a major token holder. Whatever these interactions may ultimately signify in legal, compliance, or political-symbolic terms, they at least produce a powerful visual shock: crypto capital of Chinese origin is persistently squeezed at home, yet it repeatedly finds its way into the vicinity of power abroad.

More interestingly, this phenomenon is not ideologically surprising. Ethereum’s founder, Vitalik Buterin, made a remarkably precise observation years ago: China’s crypto community is not especially concerned with “philosophy” but is instead focused primarily on the coin itself, whereas those immersed in technical ethics, institutional ideals, and decentralization narratives are more often found in European communities.

In a certain sense, China’s crypto development trajectory has been marked by a paradox deeply embedded in its domestic economic culture from the very beginning: the Chinese “short-term, fast-turnover” economic ethos is almost structurally isomorphic with the logic of token issuance (coin creation). Yet within China itself, the crypto market has been subjected to step-by-step public regulatory suppression.

In July 2017, Binance went online, and BNB began trading. On September 4 of the same year, seven ministries jointly issued a notice addressing the risks of token issuance financing; by mid-September, centralized matching between virtual currencies and the renminbi was fully suspended. This regulatory campaign—later known as the “September 4th Ban”—was indeed unprecedented in its severity.

Yet what unfolded over the following years gradually disrupted the simplistic narrative of a “total domestic wipeout.” On the surface, Chinese exchanges and the derivatives industry appeared to retreat from the domestic market; but, in reality, this so-called “going offshore” never brought an end to the penetrative reach of Chinese regulation. The multi-agency joint crackdown launched in 2021 was, in essence, a form of “full-coverage patching,” aimed at sealing the regulatory loopholes created after 2017, when trading activity shifted to overseas platforms and OTC channels.

However, if we step outside the two most common interpretive frameworks—on the one hand, the “Cold War imagination,” in which the Chinese state is seen as indirectly intervening in U.S. politics through private capital; on the other, “decentralization romanticism,” which frames the Chinese state as a closed authoritarian machine crushing free financial experiments—and instead take a sober look at crypto platforms with Chinese capital backgrounds, one conclusion becomes clear: at least across the most critical waves of regulation, they did not suffer truly “annihilating” blows.

After the 2017 regulatory actions, Huobi only gradually disclosed that its headquarters had moved to Singapore, with its servers and registration shifted to other jurisdictions; Binance, by contrast, centred itself on crypto-to-crypto trading and international users from the very beginning. These differences in strategy shaped the pace and cost of their migration, rather than their existential survival. In September 2017, Binance disclosed that 82 percent of its users already came from overseas; large numbers of users from Huobi and OKCoin simultaneously accelerated their shift into these offshore systems. In other words, the direct consequence of regulation was not a “clear-out” but rather an “acceleration of exit.”

Even today, the latest regulations surrounding stablecoins have still not criminalized “holding” itself but instead continue to place it within a distinctly Chinese grey zone: individuals may hold stablecoin but may not operate businesses with it, exchange it, use it for payment, or provide transaction-matching services with it. The core objective remains financial risk containment, not a “physical eradication” of the entire crypto ecosystem.

In this sense, what Chinese regulation has truly altered has never been whether these platforms “can survive,” but rather “where they survive with their users.” What it has stripped away are the renminbi on-ramps, domestic payment channels, and local legal legitimacy—yet in doing so, it has in fact accelerated the overall outward migration of capital, users, and transaction structures. This is precisely why those Chinese-background crypto platforms that appear to have been “besieged” at home have instead acquired far more complex—and far more dangerous—operating spaces within overseas financial and political arenas.

This grey zone also helps to explain why Justin Sun has repeatedly been rumoured to be under “exit restrictions,” yet has continued to appear in Washington’s elite political social circles. To what extent such occasions genuinely carry “state-level political significance” is, in fact, highly questionable. They resemble far more a form of performative mutual exploitation between a hyper-capitalized individual and a hyper-capitalized political family. Seen from this angle, the encounter between Sun and the Trump family is less a matter of geopolitics than a meeting of two maximally profit-driven personalities—a contest over who is more adept at converting the other’s credibility into personal leverage.

Unfortunately, for the United States, what is being consumed amid the champagne toasts may well be national-level financial and political credibility. For China, by contrast, the irony is that there is little personal credibility left for Sun to lose in the first place.

A similar logic also applies to the fate of Changpeng Zhao. Within Chinese-language discourse, he was once cast as a cautionary example—someone who had “lost his Chinese nationality, been prosecuted by the U.S. government, and systematically harvested for his wealth.” Yet the various rumors surrounding his complex entanglements with the American political system all ultimately point to the same underlying reality: once private capital expands beyond a certain scale, it simultaneously acquires the capacity to negotiate with states and becomes subjected to encirclement by multiple sovereign jurisdictions at once.

Under such multi-layered pressure, it is entirely rational—and fundamentally profit-driven—for private capital to engage in continuous “political alignment” as a survival strategy. The only real variable is which country, and which power network, it chooses to bet on. As for whether such overseas bets can in turn provide a form of leverage over one’s security boundary within China, the decisive factor has never been the will of capital itself, but rather whether the Chinese state is willing—and whether it is able—to accept such an exchange amid the competing imperatives of monetary sovereignty, financial stability, and geopolitical risk.

When discussing crypto in China, many people instinctively begin with regulation, policy, and state control of capital. This is, of course, not wrong: China has long been a system in which political power overwhelmingly outweighs capital, and capital is almost unable to shape the political agenda in the way it does in the United States. This structural reality means that Chinese crypto can never become a genuine political actor. From the very outset, it was excluded from any arena of real political negotiation.

But that is only half of the story. What is more fatal, and far less seriously examined, is the complete cultural bankruptcy of Chinese crypto bros. One need only look at Justin Sun’s social media, for instance the Chinese-language comment sections under his posts on Twitter, to see this clearly. In the Chinese Internet sphere, there is virtually no trace of technological idealism or entrepreneurial heroism left at all. What dominates instead are mockery, ridicule, sarcasm, and schadenfreude. This is not simply hostility directed at a single individual. It reflects the fact that the moral reputation of the entire Chinese crypto community in the Chinese-language context has already collapsed completely.

By contrast, the difference becomes striking when we look at the United States. There, the crypto community itself is highly differentiated and displays a certain degree of pluralism. At a minimum, it can be roughly divided into two groups: on the one hand, crypto corporations representing exchanges and financial capital; on the other, individual crypto bros, largely composed of retail participants. It is the latter group that has a particularly strong presence in online spaces.

Of course, this group has long been entangled with extreme misogyny and incel culture, and not without reason. Even so, one still has to acknowledge that within part of this group, and in certain aspects of its collective temperament, it remains possible to imagine a coherent cultural type. They may appear as anti-authoritarian geeks, libertarian technological adventurers, lone hackers fighting against the system, or solitary gamblers chasing low-probability windfalls. In some individuals, they even carry a faint aura of social escapees, figures wounded by the original order and seeking a way out at the margins.

Even if one does not personally subscribe to this image, one still must acknowledge the following: this narrative is internally coherent within the cultural structure of the United States. It is reinforced by traditions of individual heroism and underwritten at a deeper level by anti-statist and anti-authoritarian political legacies. As a result, the crypto bro at least still occupies a cultural position that can be told as a story, entered into imaginatively, and even mythologized.

From a deeper perspective in cultural history, this kind of “not yet fully corrupted” crypto narrative even carries a faint form of psychological repair for certain Americans. Against the historical shadows of Indigenous genocide, slavery, and blood-soaked capital accumulation, American society has repeatedly reproduced a fantasy in which the individual escapes the system and refuses to become a monster.

Like the cowboy in Western films who rescues a town from outlaws and then vanishes into the night, there is the figure who refuses to become a “successful monster” in the Wall Street sense, retreating instead into a dim, enclosed room and using the ideals of decentralization and financial freedom to imagine a silent escape from a pathological consumer society.

It is precisely within this cultural context that crypto becomes not merely a financial tool but also a form of resistance that is still permitted to be romanticized.

In China, by contrast, this kind of “individual-based crypto bro” culture is almost impossible to generate. A key reason is that official regulation has not only compressed the market space, but has simultaneously compressed the possibility for individuals to speak, organize, and mythologize themselves publicly through a crypto identity. Even though individual investors may still hold crypto assets within an extremely narrow grey zone, they cannot express themselves openly, cannot form stable communities, and cannot develop a culturally recognizable identity around this position. As a result, there is virtually no Chinese equivalent to the American individual crypto bro.

Consequently, the public image of China’s crypto community is no longer shaped by large numbers of anonymous retail participants but is instead “represented” by a tiny group of platform-level capital whales. In the public imagination, this entire community has been compressed into two highly symbolic figures: Changpeng Zhao and Justin Sun.

It is because of this extreme process of de-individualization that China’s crypto community has lacked, from the very beginning, the cultural soil necessary for bottom-up growth. It has produced no retail heroes, no redemptive failure narratives, and no marginal rebels. What remains are only capital scale, platform power, and wealth mythology itself. What ultimately appears is not a speculative subculture composed of ordinary people but a financial spectacle completely occupied by capitalized personalities.

These capitalized “personality figures” have, to a significant extent, been amplified and fixed in place by the highly performative, unapologetically self-interested social media persona of Justin Sun. It is precisely through this continuous cycle of self-display that China’s “crypto bro” community has almost entirely lost any remaining positive cultural narrative resources. It no longer represents technological progress, it no longer symbolizes institutional rebellion, and it certainly no longer suggests any kind of idealistic experiment. Instead, it has come to be understood, with remarkable stability, as a male-dominated circle defined by extreme speculation, mutual predation, information asymmetry, and grey-to-black market arbitrage. In short, it has become “a speculative community without a heroic narrative.”

This is far more damaging than simple “regulatory repression.” Regulation is an external pressure; the collapse of public image is an internal corrosion. When a group is already defaulted in the social imagination as a joke built on mutual betrayal, mutual hype, and mutual extraction, the problem is no longer merely that it cannot enter the political stage. It is that it is steadily losing even the qualification to enter serious public discussion at all.

Moreover, this cultural label no longer remains confined to discourse. It has already penetrated deeply into private life and intimate relationships. For Chinese crypto bros, crypto is no longer simply a financial or technological choice. It has been steadily transformed into a high-risk personality marker. When an economic activity becomes systemically coded as negative across marriage, intimacy, and gendered moral frameworks, its social failure has, in effect, already been completed.

Interestingly, within this same narrative, one can also observe that women in the Chinese crypto space tend to receive a certain degree of respect and relatively positive representation instead. This likely has something to do with China’s long-standing flexibility in gendered divisions of social roles and its cultural valorization of female wisdom. But that, of course, is another story altogether.