Probably China It's not illegal yet, but he may be preparing for worse.

It's very easy to trade coins even when they are illegal (although I haven't heard of a country that prosecutes for owning or trading BTC). You can use an international banking account and an overseas exchange, trade in person (but that could be risky as you could run into the police or some other government agency), or you could use TOR and its marketplaces to find traders.