Huobi is done with halting derivatives trading in China
Huobi, operator of the biggest cryptocurrency exchange in China, has completely shut down its derivatives trading for mainland investors on Friday.
Huobi has already added China to its list of prohibited jurisdictions and banned Chinese investors earlier from other types of crypto trading amid Beijing’s stepped-up crackdown on businesses related to bitcoin.
In September, Huobi said it would close Chinese users’ accounts by December 31, 2021. Binance and OKEx, which have wide Chinese user bases, also discontinued operations for mainland citizens and are no longer accepting user sign-ups with Chinese phone numbers, citing renewed regulatory guidelines in the country.
Huobi, one of the world’s biggest cryptocurrency exchanges, had a shareholder meeting on September 24. After the meeting, it was announced that the shareholders of the company had unanimously decided to scale back its operations and product offerings in China.
Huobi also suspended Bitcoin mining services and sales of mining equipment in the Chinese mainland in June. The company said it will focus on expanding its business overseas.
One of the co-founders of the company, Do Jun, said that in the past, they actively communicated with the country’s regulators to find ways to still legally offer trading services in the country. However, he said that this time, there was no other way and no place for discussions.
A former ‘big three’ platform, Huobi has been expanding aggressively into trading services in many other jurisdictions around the world, including Malaysia, Argentina, Russia, Korea as well as setting up an office in London.
The escalation in crypto restrictions in China has led mainlanders to seek alternate trading avenues such as decentralized exchanges (DEXs) and OTC desks. These venues are now considered viable alternatives as a result of the Chinese authorities’ decision to double down on its crypto prohibition.
To erase any doubts about their intentions, Chinese internet services were ordered to block specific keywords related to crypto exchange and also banned any crypto-related search queries.
Per media reports, the central bank plans to “promptly clean up and rectify” these platforms for providing illicit crypto trading activities.
Beijing’s tougher stance will also target overseas platforms that offer exchange-like services to mainlanders and allow them to trade the digital assets. The current rules already scrutinize Chinese banks, online-payment providers, and individuals suspected of facilitating trades on offshore cryptocurrency venues.