Reviewing the History of China's Crypto Exchanges: Grassroots Rise, Offshore Migration, and Compliance Reshaping

This article took me five days to write, consulting a vast amount of materials to chart the history of Chinese cryptocurrency exchanges. It aims to review the transformation of Chinese crypto exchanges from their wild, grassroots beginnings to global reinvention. I believe this is also a saga of an industry interwoven with technological ideals, wealth mania, regulatory shifts, and global migration.

From the birth of BTC China in a Shanghai apartment in 2011 to the three-way battle between Huobi and OKCoin in 2013; from the era when the Chinese Yuan once dominated the global Bitcoin market to the "9.4" regulations in 2017 that abruptly ended the golden age of domestic exchanges; from platforms like Binance, HTX, and OKX moving to offshore markets to the compliance restructuring under a stricter regulatory era—the story of Chinese exchanges essentially encapsulates the entire process of the crypto industry moving from lawlessness to order.

Throughout this journey spanning over a decade, some have risen from internet cafes and residential apartments to the global stage, others have topped the world between bull and bear markets, some have sold their stakes and exited, some have retreated behind the scenes, and some are still seeking a ticket back into the mainstream financial system under the pressure of regulation.

Are you ready? Let's start from that unmarked Shanghai apartment and retrace the path of Chinese exchanges: their wild beginnings, their frenzy, their overseas expansion, and their pursuit of compliance.

01 The Wild Beginnings

In the rainy season of 2011 in Shanghai, the damp and muggy air was suffocating. In a less than 20-square-meter apartment in Jing'an District, there wasn't even a proper signboard. Two paint-chipped computer desks and a jam-prone second-hand printer constituted the entire assets of China's earliest cryptocurrency exchange.

Yang Linke, cigarette dangling from his lips, stared at the dancing characters on the screen. Huang Xiaoyu typed the last line of matching code. Neither of these two young men, scraping by on the fringes of the internet, could have predicted they were opening the door to a wild frontier that would sweep the globe.

Back then in China, no one took Bitcoin seriously as a legitimate business. This virtual code from overseas was only whispered about in the corners of tech forums. And the story of Chinese cryptocurrency exchanges began, quietly, with these two young men of vastly different backgrounds and personalities.

Yang Linke was a native of Wenzhou, born in 1985. He had never followed the conventional path of studying for a degree. He dropped out of school in his teens to make his way in the world, working as an internet cafe attendant in Wenzhou and Shanghai. His youth was defined by guarding smoke-filled computers, repairing machines, handling glitches, and watching gamers play. Later, he traded virtual items and built small websites, never making a fortune but sharpening an eye for niche market demands.

He knew nothing about cryptography and had no connection with overseas tech circles. When he first encountered "Bitcoin" on a tech forum in 2010, his sharp instincts recognized a virtual token that could be transferred online without any central control. A simple idea immediately popped into his head: if people want to use it, they'll want to trade it; if there's trading, there needs to be a place for matching buyers and sellers.

At that time, even over-the-counter Bitcoin trades in China were scarce. Buyers and sellers had to post on forums, make private transfers, and manually transfer coins—a cumbersome and risky process, like people trying to barter vegetables on the street without a proper market. Yang Linke saw this untouched gap, but he lacked the technical skills and a team. All he could do was find a coder to partner with.

The person he found was Huang Xiaoyu.

Unlike the grassroots Yang Linke, Huang Xiaoyu was a well-known tech geek in the circle. He had spent years deep in programming, specializing in website development and backend construction. He was among the first in China to understand Bitcoin's underlying logic. An introvert who disliked the limelight, he was solely obsessed with code and decentralized technology. When Yang Linke found him on the forum and frankly proposed, "I'll handle operations, you write the code, let's build a Bitcoin trading website together," Huang Xiaoyu agreed almost without hesitation.

Perhaps it wasn't about making big money, but just that geeky obsession: something so cutting-edge deserved a trading platform for Chinese people.

The two scraped together tens of thousands of yuan as startup capital, rented this residential apartment as their office. No investors, no official employees, no compliance procedures. They coded and designed pages during the day, advertised on forums at night, ate instant noodles when hungry, and slept slumped over the desk when exhausted. In June 2011, Bitcoin China (BTCC) officially launched, becoming the first cryptocurrency exchange in China and one of the earliest globally.

The early BTCC webpage was extremely rudimentary, featuring only the simplest buy/sell order books and price curves, not even K-line charts. Only Bitcoin could be traded. Deposits and withdrawals were entirely manual. Users would transfer money to Yang Linke's personal bank account, and he would manually verify and credit their accounts. For withdrawals, users submitted requests, and Huang Xiaoyu manually transferred the coins one by one.

Their first few hundred users were all programmers, tech geeks, and overseas students. Daily trading volume was a mere tens of thousands of yuan. Yang Linke later recalled that he never thought about making money back then; he just felt they were doing something really cool, like building the first small path in an unexplored wilderness.

Two ordinary people, one bold enough to dream, the other bold enough to act, set up the first tent of Chinese exchanges in the wilderness.

However, this grassroots geeky little site remained tepid for two full years after its launch, never breaking out of its small circle. It wasn't until 2013 that an elite from overseas stepped in, completely changing BTCC's fate. His name was Bobby Lee.

Bobby Lee's life was a world apart from Yang Linke's and Huang Xiaoyu's.

He studied abroad early in life, graduating from Stanford University. He worked at Silicon Valley tech companies and Wall Street institutions, familiar with overseas financial markets, media operations, and business strategies. A devoted believer in Bitcoin, he was also among the first to introduce Bitcoin to Chinese commercial circles.

In 2013, Bitcoin's price skyrocketed from $13 at the start of the year to $1100 by its end. The first global bull run was sweeping in, and demand in the Chinese market exploded. BTCC's grassroots model could no longer handle the surging user influx. Bobby Lee immediately recognized BTCC's first-mover advantage. He decisively joined and took over operations, implementing three key changes that transformed the small geek website into an industry benchmark.

First, he ended the residential workshop model, registered a formal company, and built a complete team covering tech, operations, and customer service. He then engaged with domestic and international financial media, pushing Bitcoin and BTCC into the public eye, helping ordinary people understand both the currency and the trading. He also optimized the deposit and withdrawal process, enhanced system stability, and initially established security mechanisms, successfully absorbing the explosive user growth.

2013 marked BTCC's peak. Daily trading volume exceeded 100 million yuan, user numbers skyrocketed, and it became the most influential exchange in China and globally. The first-generation iron triangle of Yang Linke, Huang Xiaoyu, and Bobby Lee secured their positions as pioneers of Chinese exchanges.

That period was the absolute wild frontier for Chinese crypto exchanges. No regulatory policies, no industry standards, no risk control requirements, no formal payment channels, no fund custody. User assets were all held in the founders' personal accounts.

This wild era completed the industry's most crucial primitive accumulation:

BTCC proved that the early business model of matching Yuan and Bitcoin was viable, expanding the user base from tech geeks to ordinary investors, and providing the most direct entrepreneurial blueprint for those who followed.

Of course, the wild revelry eventually met its first wake-up call.

In December 2013, the People's Bank of China and four other ministries jointly issued a notice on preventing Bitcoin risks. For the first time, it explicitly defined Bitcoin not as a currency, but as a virtual commodity. It drew a red line, prohibiting financial institutions and payment service providers from engaging in related businesses. It directly pointed out the fatal risks of exchanges: unregistered, poor security, vulnerable to attacks, and operators potentially absconding with funds.

While this notice didn't shut down exchanges, it put the first leash on the rapidly growing industry.

Yang Linke knew, looking at the notice, that the days of grassroots workshops and grey areas were numbered. Little did he know that a disruptive battle among giants was already on the horizon.

In the winter of 2013, BTCC moved out of the apartment and into a proper office building. As their logo lit up, the three pioneers stood by the window, their eyes full of light.

They transformed from an internet cafe attendant, a tech geek, and an overseas elite into the first-generation founders of Chinese exchanges, completing the first step from 0 to 1 in the most straightforward way. But they never expected that two more aggressive entrepreneurs were already waiting in the wings, ready to break their established pattern and propel Chinese exchanges to the global pinnacle.

Li Lin and Xu Mingxing were already gearing up nearby.

Chapter 2: The Rise of the Three Giants and China's Dominance Over the World

Also in 2013, at a startup café in Beijing's Zhongguancun, the lights burned late into the night.

Li Lin stared at Bitcoin's K-line chart on his computer, pondering repeatedly. Having just emerged from the failure of his group-buying venture, he sensed an unprecedented windfall.

At the same time, in an apartment a few streets away, Xu Mingxing's fingers flew across the keyboard. This technical geek, proficient in high-concurrency trading systems, was building his own trading engine.

Two young men with entirely different backgrounds, mindsets, and approaches set their sights on the Bitcoin trading track in the same year. Instead of copying BTCC's grassroots pioneering path, they used sophisticated internet strategies to forcefully break the first-generation pattern established by Yang Linke and Bobby Lee, catapulting Chinese crypto exchanges from a niche tech circle to global dominance.

Li Lin was born in Shaoyang, Hunan, in 1986. A seasoned internet product manager, he was a computer prodigy in his student days. After graduation, he joined major companies like Renren.com and Oracle, mastering product design and user operations. In 2010, he rode the group-buying wave, founding Mengmai.com, which once ranked among the top ten in China but ultimately fell victim to the fierce "Thousand Group-Buying Wars."

This failure was an eye-opener: for small entrepreneurs to break through, they needed to focus on vertical tracks, address core pain points, and maintain asset-light operations.

In 2013, as Bitcoin surged from $13 to over $1000, domestic trading demand exploded. Li Lin immediately tried BTCC but was frustrated by its poor experience: laggy pages, cumbersome deposits, unreachable customer service. Users' needs were severely neglected. He instantly identified the industry's Achilles' heel: China didn't lack people wanting to trade crypto; it lacked easy-to-use, fast, and reliable trading platforms.

At that time, BTCC, relying on its first-mover advantage, had established itself but still carried the roughness of a geek site. In September 2013, Li Lin announced the launch of Huobi, leveraging "easy, free, and fast." Within three months of its launch, its trading volume exceeded one million yuan, starting to challenge BTC China's first-mover advantage.

Li Lin's breakthrough strategy was user experience: instant deposits and withdrawals, 24/7 customer service, a smooth interface. He then deployed a killer feature: permanent free trading, directly undermining the fee-based model of the first-generation platforms.

While Li Lin was aggressively capturing the market through user experience, Xu Mingxing, who also wanted to profit from this track, took a completely opposite path.

Born in 1985 in Suzhou, Jiangsu, Xu Mingxing was a tech geek. A graduate of Beijing University of Posts and Telecommunications, he mastered distributed systems and high-concurrency architectures in college. After graduating, he worked at Yahoo China, participating in world-class trading system development, and later served as the Technical Director at Docin.com, thoroughly understanding the stability of platforms with millions of users.

When he encountered Bitcoin, he didn't focus on retail user experience at all. Instead, he immediately targeted the core barrier of the trading system. At the time, no domestic platform's matching engine could handle massive trading volumes and high-frequency quantitative trading. Institutional users had no place to go. Xu Mingxing's goal was to build China's most stable and fastest exchange, specifically for institutional services.

In October 2013, OKCoin officially launched, branding itself as "technologically top-tier, professional trading," challenging Huobi head-on.

He personally led the coding of the matching engine, creating a system capable of millisecond execution and handling tens of thousands of concurrent orders, directly surpassing BTCC's outdated architecture. He focused on quantitative and high-frequency trading, capturing professional investors and institutional teams, a stark contrast to Li Lin's retail-oriented approach.

One understood users, targeting retail; the other understood technology, serving institutions.

Li Lin and Xu Mingxing, in the same year on the same track, carved out two complementary yet competing paths to success.

By the end of 2013, Huobi and OKCoin had both risen, completely breaking BTCC's monopoly. The three-way stalemate of Chinese exchanges was officially formed.

At that time, BTCC relied on its pioneering reputation, overseas resources, and brand loyalty to retain its old users. Huobi became the platform with the largest user base through its superior experience and aggressive operations. OKCoin monopolized the institutional and quantitative market with its top-tier technology.

The three didn't engage in destructive competition but instead worked together to expand the industry pie. With the opening of Yuan deposit channels and the standardization of trading processes, accessing the crypto space became easier, turning exchanges from a fringe business into the most profitable startup track.

The global influence of Chinese exchanges began to emerge, and it was a sudden global black swan event that allowed them to take over the world.

In February 2014, the global crypto industry was rocked by shocking news. Japan's Mt. Gox exchange, which once handled over 70% of global Bitcoin trading volume, was hacked and 850,000 Bitcoins were stolen due to internal mismanagement, leading directly to its bankruptcy.

The global cryptocurrency trading system collapsed instantly. Users panicked and fled, liquidity dried up, prices plummeted. European and American exchanges were in total disarray, leaving a massive vacuum in the market.

China's three major platforms seized this opportunity to rewrite history: the Yuan trading system was mature, the user base large, and liquidity ample. Huobi and OKCoin's systems were capable of handling the global overflow of traffic. BTCC, with its overseas resources, connected international users.

Within just three months, the center of global Bitcoin trading shifted from Tokyo to Beijing and Shanghai.

From 2014 to 2016, BTCC, Huobi, and OKCoin firmly held over 80% of global Bitcoin trading volume, even peaking at over 90%. The Yuan became the core pricing currency for Bitcoin. China's trading hours, policy direction, and user sentiment directly influenced the global Bitcoin price.

In the early hours of the morning in Beijing, Huobi's customer service team was still processing orders. In the dead of night in Shanghai, BTCC's matching engines were running at high speed. Quantitative teams in Shenzhen were executing high-frequency trades on OKCoin. China was the undisputed global center of cryptocurrency.

These were the most glorious three years for Chinese exchanges. No stringent regulations, no vicious internal competition, no fatal collapses. The three giants jointly ruled the world, reaping huge profits. Li Lin, Xu Mingxing, and Bobby Lee stood at the pinnacle of the industry, becoming the most recognizable Chinese faces in the global crypto circle.

During this era of giant dominance, smaller platforms also sprang up like mushrooms, and the industry entered a period of prosperous competition. Chinese Bitcoin focused on the lower-tier market with low fees, Bitcoin Trading Network specialized in spot trading, and Bter.com pioneered niche altcoins. By 2016, the number of formal domestic exchanges exceeded 30, and Bitcoin traders formed a considerable group from first-tier cities to small towns.

During this stage, there was only pure spot trading. Everyone thought the golden age would last forever.

But beneath the surface of prosperity, undercurrents were already stirring.

The competition for users among the three giants was becoming increasingly fierce. Pure spot trading could no longer satisfy their expansionist ambitions. Smaller platforms were eyeing futures, leverage, and altcoins as new profit sources. And the watchful eye of regulators was shifting from "defining virtual commodities" to the rapidly infl