Bybit, the second-largest cryptocurrency exchange globally, has now opened its platform to mainland Chinese citizens living abroad. This strategic move comes as China maintains its stringent ban on crypto trading, and global regulatory scrutiny intensifies.

The Dubai-based company announced late Thursday that it is welcoming the “overseas Chinese community” — mainland citizens residing outside China — to register and trade on its platform. Bybit’s registration page confirms that users can sign up with mainland Chinese identification documents, such as national IDs and passports.

Despite this new access, Bybit continues to block account applications from mainland Chinese IP addresses or phone numbers, as verified by tests conducted on Thursday. An IP address generally indicates the geographical location of an internet-connected device, but many cryptocurrency investors in China use virtual private networks (VPNs) to disguise their true location and bypass IP restrictions.

Bybit declined to elaborate on how it verifies that a Chinese user resides outside the country, referring only to its statement and know-your-customer (KYC) guidelines. According to these guidelines, users with a daily withdrawal limit of approximately $2 million must provide proof of address.

In blocking Chinese IP addresses, Bybit’s measures may be more rigorous than those of some other exchanges. For instance, Binance, which was founded in Shanghai in 2017, continued to serve Chinese users even after scaling down its operations there. Mainland users could register using their national ID numbers by selecting Taiwan as their location.

Bybit reaffirmed on Thursday its commitment to complying with all applicable regulations in the markets where it operates. This announcement followed a report from cryptocurrency news outlet Wu Blockchain on Wednesday, which suggested that Bybit had opened registration for “users in China,” sparking speculation about a potential relaxation of China’s cryptocurrency restrictions.

Over recent years, Beijing has intensified its crackdown on cryptocurrency activities. Bybit began blocking mainland Chinese IP addresses in September 2020 and subsequently announced the closure of all accounts registered with mainland phone numbers. In 2021, ten government agencies in mainland China declared cryptocurrency businesses illegal.

Bybit indicated that its latest initiative responds to the increasing demand for secure and user-friendly cryptocurrency trading platforms among Chinese expatriates and international Chinese communities. Liu Honglin, founder of the Shanghai-based Mankun law firm specializing in blockchain issues, suggested that commercial motivations might also be influencing Bybit’s decision. Bybit could be looking to attract more retail investors amid a bullish crypto market and tightening global regulatory scrutiny.

Both Bitcoin and Ether prices have surged by over 60% this year.

Bybit, established in 2018 and the second-largest crypto exchange by 24-hour trading volume according to CoinGecko data on Friday, is among several exchanges with Chinese links that recently abandoned their efforts to obtain operational licenses in Hong Kong. This decision followed new regulations in the city requiring virtual asset trading platform license applicants and their associated entities not to serve mainland Chinese residents.

Despite currently being unable to serve Hong Kong residents, Bybit stated on Thursday that it is actively working to understand the licensing requirements and expectations set by the city’s authorities.