Huobi decides to leave China before wave of repression
Bitcoin exchange Huobi has decided to leave China before Beijing once again tightened regulation of the cryptocurrency industry. The company has also ruled out the possibility of further operations in the country, Bloomberg wrote.
According to the publication, Huobi founders and investors "unanimously supported" the departure from the Chinese market at a shareholder meeting on September 24.
Later the same day the State Development and Reform Committee of China pointed out the negative impact of mining on the environment and its "insignificant" contribution to the country's economy. The local Central Bank described as illegal the activities of platforms that exchange digital assets among themselves or for fiat.
Huobi has stopped registering new users in mainland China and announced it would remove existing accounts by December 31.
In the past, we have talked to regulators to see if there are still ways to operate legally in the PRC. But this time there is no room for discussion, Huobi co-founder Du Jun told Bloomberg.
He said the company was planning to leave the jurisdiction from early 2021. The original plan, which was backed by investors Sequoia China and ZhenFund, was to shut down accounts of Chinese users - the "unexpected announcement by the authorities" only accelerated the process, Du Jun noted.
He cited global expansion as Huobi's current strategy. This is evidenced by active hiring in Turkey and Brazil, the publication noted. The co-founder of the firm added that Huobi Group currently generates almost 70% of its revenues outside of China.
Authorities have repeatedly increased pressure on the industry in 2021. In May, Chinese Vice Premier Liu He announced measures against mining and digital asset trading. China's Xinhua news agency later criticised bitcoin and its mining methods.
Three associations under the country's Central Bank issued a joint notice prohibiting companies from supporting digital asset-related businesses.
At the time, Huobi refused to host miners in mainland China and shut down local investors' access to trading crypto derivatives. In July, the company announced the liquidation of its legal entity in Beijing, explaining the decision by the lack of need for a subsidiary.
Recall that Republican Senator Pat Toomey called Beijing's crackdown on cryptocurrencies a big opportunity for the US.
Former NSA and CIA official Edward Snowden said that the actions of the Chinese authorities "have only strengthened bitcoin".