Bloomberg: Huobi to exit China ahead of wave of crackdowns

The Huobi cryptocurrency exchange has decided to leave China before Beijing once again tightens regulation of the crypto industry. The company has also ruled out the possibility of continuing operations in the country, according to Bloomberg.

According to the publication, at a shareholders’ meeting on September 24, the founders and investors of Huobi “unanimously supported” exiting the Chinese market.

Later that same day, the National Development and Reform Commission of the PRC pointed to the negative environmental impact of mining and its ‘insignificant’ contribution to the country’s economy. The local central bank described as illegal activity the platforms that enable exchanges of digital assets among themselves or into fiat.

Huobi ceased registering new users in mainland China and announced that by December 31 it would remove existing accounts.

“In the past we talked with regulators to determine whether there are still ways to conduct legitimate activity in the PRC. But this time there is no room for discussion,” said Huobi co-founder Du Jun in an interview with Bloomberg.

According to him, the company had planned to leave the jurisdiction since the start of 2021. The initial plan, backed by Sequoia China and ZhenFund, was to close Chinese user accounts — “an unexpected government statement” only accelerated the process, Du Jun noted.

As its current strategy, Huobi described global expansion. The publication notes active hiring in Turkey and Brazil. The co-founder added that Huobi Group now derives nearly 70% of its revenue from outside China.

In 2021, authorities repeatedly intensified pressure on the industry. In May, Vice Premier Liu He announced measures regarding mining and the trading of digital assets. Later, Xinhua News Agency criticised Bitcoin and its mining methods.

Three associations under the central bank issued a joint notice prohibiting companies from supporting businesses tied to digital assets.

At that time Huobi refused to host miners in mainland China andrestricted local investors’ access to trading crypto derivatives. In July the company announced the dissolution of a Beijing-based legal entity, citing the lack of need for a “subsidiary.”

As reported, Republican Senator Pat Toomey described Beijing’s crackdown on cryptocurrencies as a big opportunity for the United States.

Former NSA and CIA employee Edward Snowden said that the actions of Chinese authorities only strengthened Bitcoin.

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