After crackdown, a new Bitcoin king emerges in China.

Meanwhile, China’s two other big exchanges — Huobi and OKCoin — are bypassing payment processors by letting users wire money directly into exchange bank accounts, says Scott Freeman, a China-based entrepreneur who is also a Bitcoin investor. That’s a slower process, but he says that since the December regulatory changes, trading has gone on in the country pretty much unabated. Lee says that BTC-China isn’t going the direct payment route because they would first need to be licensed as a payment processor to receive and pay out money from BTC-China’s corporate bank account.

Huobi’s big advantage seems to boil down to one thing: it does not charge trade commissions, while its competitors do. Apparently, nothing beats a free product when you’re an upstart company looking to gain market share. And as Reddit readers have pointed out, a commission-free exchange is an attractive crash pad for automated trading software, which seeks to profit on Bitcoin’s daily ups and downs.

According to Lee, BTC-China dropped its trading fees in September, right before the fall run-up in Chinese Bitcoin trading. But when China’s regulators stepped in in December, Lee decided to reinstate them in order to disarm criticism that the trading freebies were contributing to a speculative Bitcoin bubble. OKCoin followed suit, but not Huobi.

Read the full article in Wired Magazine here.