Huobi, the largest Chinese exchange, has now made the decision to abandon its market in China and concentrate on expanding globally. The move was decided at a shareholder meeting just hours before the Chinese government made an announcement to ban all crypto transactions and services.
Huobi has already ceased allowing any new registrations in China, and has said that it will remove all existing Chinese users of the platform by the end of the year.
While Huobi now generates around 70% of its revenue from outside China, retail traders in China accounted for 20% of the exchange trading volume as of last year, although the exchange has said that retail users were making less transactions than institutions.
Up until now, Huobi had retained hope of working with regulators in order to stay in China given the links it had built up with the government over years. However, in an interview with Bloomberg, co-founder of Huobi Du Jun said:
“In the past, we had been communicating with regulators to see if there are still ways to legally operate in China. But this time, there’s no room for discussion. Our strategy is all about going global now.”
Now Huobi is following the path trodden by the likes of Binance and Bitmain who have already moved their activities out of China. Huobi has over 10 million users worldwide, with most of those based in Europe, SE Asia, and the Middle East.
New hires are taking place in the likes of Brazil and Turkey, with up to 3000 new employees envisaged across the globe.
According to Jehan Chu, co-founder and managing partner of Kenetic Capital:
“Huobi has long been a top global exchange and is no stranger to years of tightening Chinese crypto regulations. With a massive balance sheet and strong international customer base I believe they will adapt and double down in more welcoming jurisdictions outside China.”
As for Chinese crypto investors, it remains to be seen whether their ingenuity will enable them to get around the crypto ban. According to the Bloomberg article, two ways of doing this currently being discussed on a Chinese-language Telegram group are, getting a foreign passport, and moving all crypto assets to wallet apps.
Huobi is one of the longest running exchanges, founded in 2013 by Du Jun, who directed the marketing effort, and Leon Li, the coder from Oracle Corp. By offering zero transactions fees, the pair were able to turn Huobi into the most used Bitcoin exchange.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.