Huobi shuts down its Beijing entity
According to reports from The Block, Huobi is shutting down its China-based entity, initially founded in 2013. The reason is believed to be China’s repressive policy in relation to cryptocurrency assets and related businesses.
Chinese authorities’ attitude to the cryptocurrency market
In addition to its success in the field of researching and integrating CBDC (central bank digital currency) into the economy, China is also well known for its negative attitude towards private digital assets and crypto businesses.
Having driven mining businesses out of the country, Chinese authorities have not forgotten to clip the wings of various cryptocurrency organisations, some of whom politicians once consulted on blockchain and CBDC-related issues.
The company that the well-known cryptocurrency exchange is about to close was established in 2013 and was used to run the cryptocurrency exchange in China. Now, Huobi is no longer under the Chinese jurisdiction, so there is no reason to maintain the Beijing-based entity.
According to a Chinese business records website, Beijing Huobi Tianxia Network Technology Limited is dissolving itself, and Huobi Group founder and CEO Li Lin is listed as the person responsible for the clearing and liquidation processes.
The news only broke today when the Chinese media started talking about the company’s dissolution. In its turn, this caused stocks of another Huobi Group subsidiary — Huobi Tech, also owned by Li Lin — to plummet. In just a few hours, the company’s shares plunged by more than 20%.
This event is not the only case of cryptocurrency organisations under the Chinese jurisdiction being dissolved. Just a month ago, Beijing Lekuda, founded in 2012 by OK Group’s Star Xu, announced it was shutting down.
Huobi and OKEx will not be affected by these developments. Cryptocurrency exchanges have long since relocated away from being subject to China, choosing to settle down in less radical jurisdictions.
Previously, it was also reported that many crypto entrepreneurs from China have decided that they would rather suspend their projects, or simply start targeting foreign customers.
The digital assets market in China is going underground. No one would be surprised if Beijing’s next decision is a complete ban on private cryptocurrency storage. That would also include bitcoin.
In May, China banned financial institutions and payment companies from providing services to cryptocurrency-related businesses. In June, China witnessed mass arrests of people suspected of using cryptocurrencies for nefarious purposes. In the same month, regulators stepped up pressure on banks and payment companies to block cryptocurrency services, while Weibo, often referred to as China’s Twitter, suspended cryptocurrency accounts.
A consultant since 2013 for a important advisory cabinet, I wanted to specialise in emerging tech… crypto found me!