Crypto investors in China may have been attracted by the ‘crazy’ gains offered in the decentralized finance (DeFi) industry, which is somewhat affecting crypto exchanges in the country. Chinese exchanges are reportedly facing hard times as local users are pulling massive withdrawals which are intended to be invested in DeFi projects to farm huge interest.
Chinese investors are interested in DeFi
Confirming the growing interest in DeFi amongst several Chinese residents, reports noted that daily searches for the word ‘DeFi,’ surged to almost 900,000 on WeChat, the popular Chinese social media platform. The new figure which was recorded on September 2, is considered as the highest point ever as, almost doubling the previous search report at 500,000.
In accordance with the growing interest in DeFi, local investors began cashing out their crypto holdings from Chinese exchanges for yield farming projects. As Colin Wu, a Chinese journalist reported on Monday, these exchanges began struggling with liquidity issues because the users were pulling wholesale withdrawals. Some Chinese exchanges had to suspend crypto withdrawals at some point.
Investors leave Chinese exchanges for DEX
Consequently, the suspension of the withdrawal service led to an emergence coin withdrawal campaign. Wu tweeted:
“Breaking: On Sep 6th, many exchanges in China experienced difficulties in withdrawing coins and shutdowns. Chinese community is launching a “coin withdrawal campaign”, calling to withdraw all USDT and crypto in the exchange and delete their accounts.”
In a chart, Wu pointed out how several digital currency traders in the country moved on to quickly buy Ether (ETH) amid the price drop. In turn, they transferred the cryptocurrencies to decentralized exchange (DEX) to trade high interest-yielding tokens.
He further opined that Chinese exchanges had to support most of the DeFi tokens to prevent their users from transferring their capitals to DEXes.