China recently imposed a strict ban on all private cryptocurrencies. Among those affected are Huobi Global — one of the world’s largest crypto exchanges.
But the company criticized the ban saying it will obliterate nearly one-third of its revenues. Huobi Global is looking to move into new markets to spur its growth.
Owing to China’s crypto crackdown, Huobi Global is forced to give up almost 33% of its revenues and cut off its China clients (and desist from doing business with them).
To manage their losses, Huobi is hunting for new grounds in other financial centers, citing the global impact of China’s “unruly” decision as to the reason for the move.
Huobi to stop servicing Chinese users
Du Jun, Co-Founder of Huobi Global, said they’ll block all Chinese users from accessing Huobi’s crypto services. “[As from] late September to December 31 [this year], there will be no Chinese users on the platform … so our [China] revenues are going to go to zero”.
The company is among the many crypto exchanges in the world to benefit from Bitcoin’s soaring prices since March last year. Bitcoin’s series of all-time highs has seen Coinbase, FTX, Huobi, and other exchanges become billion-dollar companies.
Jun disclosed that 70% of his company’s revenues are stashed overseas, adding his also accelerating efforts to expand in other global markets — and grow his company’s global headcount from the current 1,000.
“We are very comfortable in Asia [specifically in Seychelles] and we’re the leader here, but we need a new emphasis, we need to go global”.
Regulations forcing Huobi to scale up global operations
The regulation shifts in China is forcing Huobi to scale up its global operations. The company is aggressively targeting crypto retail customers based in Latin America, Turkey, and Russia. And further targeting large investors based in the US and Europe.
According to data, nearly $211 billion worth of cryptocurrency assets was transacted on the Huobi Global platform, down from 74% since the crypto ban in May.
Huobi Global is a private crypto exchange with no direct relationship with Hong Kong-listed Huobi Technology Company running an asset management arm offering crypto-related funds. But Jun says the company’s founder is a shareholder in Huobi Global.
China was home to a majority of crypto mining and trading activities until 2018 when the overwhelming dominance in Bitcoin markets came crashing thanks to the country imposing bans — and stricter oversight rules — on cryptocurrency.
In October this year, a series of crackdowns finally culminated in China’s banning all digital assets. The US is now leading as the largest crypto mining hub globally.